BANCROFT 
LIBRARY 


University  of  California  •  Berkeley 


THE  NICARAGUA  CANAL. 


THE  NICARAGUA  CANAL. 


AN  OPEN  LETTER 

TO 

The  PRESIDENT  of  the  UNITED  STATES 
OF  AMERICA, 

PROTESTING 

AGAINST  THE  PROPOSED  HILL  TO  INCORPORATE 
THE  MARITIME  CANAL  COMPANY  OP  NICARAGUA 

(Senate,  1305  ;  House,  5615,  60th  Congress,  188S), 

AND  AGAINST  JOINT  RESOLUTION  (s.  n.,  40) ; 


FHUM    T1IK 


AMERICAN  ATLANTIC  &  PACIFIC 
SHIP  CANAL  COMPANY. 


Mb 


To  His  EXCELLENCY  GROVER  CLEVELAND, 

PRESIDENT  OF  THE  UNITED  STATES, 

WASHINGTON,  D.C. 

SIR: 

THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL 
COMPANY   on   January  12th,    1888,  addressed   the    following 

PROTE  ST 

"  To  THE  HONOURABLE  THE  SPEAKER 

"  AND  MEMBERS  OF  THE  HOUSE  OF  REPRESENTATIVES 

"OF  THE  UNITED  STATES. 
"  SIRS  : 

"  The  attention  of  this  Company  has  been  called  to  the  matter 
of  the  introduction  in  the  Congress  of  the  United  States  of  a  '  Bill  to 
Incorporate  the  Maritime  Canal  Company  of  Nicaragua.' 

"  Against  the  consideration  and  passage  by  Congress  of  said  above  Bill 
to  incorporate  the  Maritime  Canal  Company  by  Nicaragua,  THE  AMERICAN 
ATLANTIC  AND  PACIFIC  SHIP  CANAL  COMPANY  respectfully  urges  its 
earnest  and  most  emphatic  protest.  The  grounds  for  this  action  are 
as  follows,  to  wit : — 

"  I.— THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL  COMPANY 
most  respectfully  beg  to  state  that  the  said  AMERICAN  ATLANTIC  AND 
PACIFIC  SHIP  CANAL  COMPANY  is  a  legally  organised  Corporation  having  a 
Charter  of  Perpetual  Succession  granted,  enacted  and  decreed  by  the 
Government  of  the  Republic  of  Nicaragua. 

"  II. — The  State  of  Nicaragua  granted,  under  contract,  decree  and 
charter  to  said  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL  COMPANY 
the  exclusive  right  and  privilege  to  construct,  own  and  manage  a  Ship  Canal 
across  the  territory  of  said  State  from  the  Atlantic  to  the  Pacific  Ocean. 

"  III.— Eminent  counsel  have  given  opinion  '  That  the  right  conferred 
upon  THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP'  CANAL  COMPANY  by 
the  Republic  of  Nicaragua,  in  the  contract  between  that  Republic  and  the 
Company,  to  build  a  Ship  Canal  across  the  territory  of  the  Republic  survives 
unimpaired  in  favour  of  that  Company.' 

"  IV. — The  location  of  the  line  of  the  Canal,  as  adopted  and  fixed  by 
this  Company,  is  as  follows,  to  wit :— Beginning  at  a  point  at  or  near  the 
Port  of  Greytown,  on  the  Atlantic  Ocean,  in  the  Republic  of  Nicaragua, 
and  running  thence  in  a  general  westerly  direction  to  the  river  San  Juan ; 
thence  up  and  with  the  course  of  said  river,  passing  into  the  Lake  Nicaragua, 
through  the  said  Lake,  and  thence  by  a  Canal  cut  into  the  Rio  Grande, 


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thence  by  the  valley  of  the  said  Rio  Grande  to  a  point  at  or  near  the  Port 
of  Brito  on  the  Pacific  Ocean,  in  said  State  of  Nicaragua, 

"V.— This  Company  has  heretofore  expended  large  sums  of  money 
upon  this  work,  in  the  improvement  of  the  San  Juan  River,  the  construc- 
tion of  houses,  the  building  of  highways  from  the  Lake  to  the  Pacific  Ocean 
at  San  Juan  del  Sur,  &c.,  and  this  Company  is  now  daily  expending  sums 
of  money  in  the  necessary  preparations  for  the  commencement  and  early 
completion  of  its  Ship  Canal  across  the  territory  of  Nicaragua. 

"VI. — This  Company  has  recently  made  contracts  with  entirely 
responsible  contractors  for  the  construction  of  all  of  the  locks,  gates, 
valves,  and  machinery  for  operating  the  same,  for  all  the  warehouses, 
stations,  piers,  docks,  wharves,  bridges,  iron  work  and  Railway  to  be 
constructed  in  connection  with  the  Canal ;  and  has  also  made  a  contract  for 
the  construction  of  the  western  division  of  its  Ship  Canal,  extending  from 
the  Lake  to  the  Pacific  Ocean.  Contract?  for  nearly  all  of  the  work  of  con- 
structing the  Canal  have  been  let  to  entirely  responsible  contractors. 

"  VII.— This  Company  expects  to  complete  its  inter-oceanic  Ship 
Canal  across  the  territory  of  Nicaragua  within  three  years'  time,  if  not 
prevented  by  the  prejudicial  action  of  the  Government. 

"  VIII. — In  order  to  provide  sufficient  funds  for  the  construction  of  its 
Ship  Canal,  the  Company  has  found  it  necessary  to  borrow  money  upon  the 
first  mortgage  Bonds  of  this  Company,  and  for  that  purpose  the  Company 
has  authorised  and  issued  one  hundred  million  dollars  of  first  mortgage 
Bonds  of  this  Company  ;  these  bonds  have  in  part  been  delivered  to  the 
subscribers  and  owners  thereof;  and  to  fully  provide  for  the  repayment  of 
eaid  bonds  at  maturity,  this  Company  has  legally  executed  and  delivered  to 
the  Trustee,  who  has  received  the  same,  and  undertaken  to  execute  the 
trust  thereby  reposed  in  him,  a  deed  of  mortgage  for  $100,000,000,  which  is 
made  a  first  lien  and  mortgage  upon  the  Ship  Canal,  franchise,  rights,  and 
all  the  property  of  this  Company,  situated  and  being  in  said  State  of 
Nicaragua. 

"  IX. — This  Company  begs  further  to  state  that  the  so-called  Maritime 
Canal  Company  of  Nicaragua,  and  the  parties  named  as  corporators,  are 
simply  interlopers  who  are  trying  to  deprive  THE  AMERICAN  ATLANTIC 
AND  PACIFIC  SHIP  CANAL  COMPANY  of  its  right  of  way,  and  its  exclusive 
right  to  construct  and  manage  its  Ship  Canal  across  the  territory  of  Nicaragua 
and  its  vested  rights  of  property,  which  has  cost  this  Company  large  sums 
of  money,  laboriously  and  honestly  expended  in  this  work  and  for  these 
purposes. 

"  X. — This  Company  further  states,  upon  information  believed  to  be 
true,  that  certain  parties  representing  and  claiming  to  be  the  Maritime 
Canal  Company  of  Nicaragua,  have  confederated  and  combined,  and  are 
now  engaged  in  an  attempt  to  seize  upon  the  right  of  way,  water  channels, 
rivers  and  other  vested  rights  and  properties  of  THE  AMERICAN  ATLANTIC 
AND  PACIFIC  SHIP  CANAL  COMPANY,  in  the  State  of  Nicaragua. 


"  In  order  to  accomplish  their  designs  against  this  Company,  the  said 
parties  have  recently  sent  their  emissaries  and  agents  to  Nicaragua,  and 
these  ageiit?,  by  specious  representations,  and  by  offering  and  promising 
to  give  to  the  Government  of  Nicaragua  large  amounts  in  the  shares,  bonds, 
certificates  or  title  deeds  of  the  said  proposed  Company,  amounting  to  not 
less  than  40,COO  shares  or  bonds  of  a  face  value  of  not  less  than 
$4,000,000,  and  by  a  further  loan  of  an  insignificant  sum  of  money, 
which,  under  certain  conditions,  was  agreed  to  be  deposited  to  the  credit  of 
the  Government. 

"  These  parties,  by  holding  out  such  inducements,  by  making  promises 
and  agreements,  influenced,  and  obtained  from  the  Government  of  Nicaragua 
a  conditional  contract,  or  so-called  concession.  This  Company  is  advised 
by  counsel  that  this  so-called  concession,  and  contract  made  by  the  Govern- 
ment ivith  said  Maritime  Canal  Company,  is  unconstitutional  and  lee/ally  void 
and  would  so  be  held  and  decided  by  any  international  tribunal  or  court  of 
justice. 

"  By  reason  oi'  the  conditions  and  provisions  of  the  grants,  statutes, 
decrees  and  contracts  made  by  the  Government  of  Nicaragua  to  and  with 
THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL  COMPANY,  the 
Government  could  not  legally  make  a  new  concession  or  contract  with  any 
other  party  or  company  that  would  violate  existing  contracts,  and  seize 
upon  and  take  away  the  vested  rights  and  property,  lawfully  acquired, 
owned  and  held  by  this  Company. 

"  XI. — This  Company  also  deems  it  proper  to  call  your  attention  to  the 
unwise  character  of  some  of  the  provisions  of  said  so-called  concession  and 
contract,  as  made  by  the  Government  of  Nicaragua  to  the  Maritime  Canal 
Company,  especially  Article  44,  which  provides  that  the  products,  com- 
merce and  ships  sailing  under  the  flags  of  certain  favoured  Governments 
and  States  can  pass  through  the  Canal  at  a  reduction  of  50  par  cent. 
of  the  tariff  or  tonnage  dues  charged  upon  vessels  sailing  under  the  United 
States  flag. 

"  This  unreasonable  and  unjust  discrimination  against  American  com- 
merce, and  vessels  sailing  under  the  American  flag,  is  the  more  remarkable, 
when  it  is  known  that  the  Agent  of  the  so-called  Maritime  Canal  Company, 
who  made  this  contract,  has  been  for  a  number  of  years  a  servant  in  the 
employ  and  pay  of  the  Government  of  the  United  States,  and  that  some  of 
the  parties  claiming  to  be  interested  in  said  Company  are  stated  to  be  officers 
under  pay  in  the  United  States  Navy,  and  others  claim  American 
citizenship. 

"  Y"et  notwithstanding  the  unwise,  unpatriotic  and  unjust  discrimina- 
tions of  said  contract,  or  so-called  concession,  against  American  commerce 
and  all  vessels  sailing  under  the  flag  of  the  United  States,  these  same  servants; 
patriotic  officers  and  public-spirited  citizens,  have  with  unblushing  assurance 
introduced  a  Bill  into  the  Congress  of  the  United  States,  and  ask  for  the 
enactment  of  a  law  to  incorporate  this  foreign  Company,  that  notoriously 


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proposes   to  discriminate   in    the   most    unjust  manner  against  everything 
American — but  themselves. 

"  This  Bill  to  incorporate  the  Maritime  Canal  Company  of  Nicaragua, 
which  these  parties  ask  the  Congress  of  the  United  States  to  enact  into  a 
law  of  the  laud,  is  nothing  more  or  less  in  effect  than  a  '  Letter-of-Marque  ' 
against  the  rights,  commerce  and  property  of  American  citizens,  and  is 
intended  as  an  c  act  of  spoliation '  against  THE  AMERICAN  ATLANTIC  AND 
PACIFIC  SHIP  CANAL  COMPANY. 

"XII. — The  so-called  Maritime  Canal  Company  of  Nicaragua,  knowing 
full  well  the  inadequacy  of  their  title,  and  the  unconstitutionality  of  their  so- 
called  contract  or  concession,  as  made  with  the  Government  of  Nicaragua, 
are  seeking  to  commit  the  United  States  Government  to  the  special  pro- 
tection of  this  interloping  company  by  securing  an  Act  of  Congress 
incorporating  said  company,  and  it  is  expected  by  them  that  if  such  Act  is 
secured,  it  will  give  the  so-called  Maritime  Canal  Company  of  Nicaragua  a 
quasi  standing  before  the  public,  which  in  the  face  of  the  priority  and 
exclusive  rights  of  THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL 
COMPANY  they  otherwise  would  not  have. 

"XIII. — As  simple  act  of  justice,  the  Bill  to  incorporate  the  so-called 
Maritime  Canal  Company  should  be  withdrawn  or  defeated.  These  parties 
should  not  be  allowed  to  interfere  with  a  legitimate  company  who  are 
making  progress  in  this  great  work,  and  who  have  exclusive  and  inalienable 
rights  to  said  property  of  said  Ship  Canal  across  the  territory  of  Nicaragua. 

"  XIV.— THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL  COMPANY 
have  an  abiding  faith  in  the  integrity  of  the  Congress  of  the  United  States, 
and  this  Company  does  not  believe  that  Congress  will  pass  an  Act  which 
has  for  its  objects  and  purposes  robbery  and  spoliation  of  American  citizens, 
and  which  would  disregard  the  Treaty  obligations  of  the  United  States 
with  a  great  and  friendly  nation. 

"  XV.— This  Company  finally  begs  to  state  that  the  United  States  and 
Great  Britain  are  joint  treaty  guarantors  to  the  protection  of  this  Company 
during  the  time  it  is  engaged  in  the  construction  of  its  Ship  Canal,  as  and 
in  the  terms  of  the  Clayton-Bulwer  Treaty  made  between  those  two 
Governments  on  the  19th  day  of  April,  1850." 

"  The  Company  has  the  honour  to  be, 

"  Your  most  obedient  servant, 
"THE  AMERICAN  ATLANTIC  AND  PACIFIC  SHIP  CANAL  COMPANY. 

"By  A.  L.  BLACKMAN,  President" 
[SEAL.] 

This  Company  is  advised  by  counsel,  and  begs  further  to 
state  that  it  is  ready  and  prepared  to  put  a  large  force  of  men 
to  work  in  the  construction  of  their  Ship  Canal  in  Nicaragua, 
and  so  notified  the  Government  of  that  Republic,  as  did  also 
the  contractors  of  this  Company. 


USING  THE  NAVY   AS  A  CAT'S  PAW. 

But  the  settlement  of  past  differences,  and  the  good  under- 
standing as  between  this  State  and  the  Company,  has  been 
very  much  prejudiced,  hindered,  obstructed  and  delayed  by 
the  action  of  certain  designing  persons  and  officers  connected 
with  the  United  States  Navy  ;  and  these  persons  have  actively 
co-operated  for  a  number  of  years  past  to  obstruct,  hinder, 
delay,  and  if  possible  prevent  the  American  Atlantic  and 
Pacific  Ship  Canal  Company  from  building  its  canal  across  the 
territory  of  Nicaragua. 

These  same  officers  and  persons,  while  in  the  employ- 
ment and  pay  of  the  United  States  Government,  have  systema- 
tically used  their  positions  as  such  officers,  and  the  prestige  of 
being  connected  with  the  United  States  Government,  to 
influence  and  prejudice  the  said  Government  of  Nicaragua 
against  the  American  Atlantic  and  Pacific  Ship  Canal 
Company,  in  order  that  they  might  secure  a  concession,  and 
take  control  of  this  canal  route  for  their  personal  gain. 

As  proving  the  illegal  course  pursued,  and  the  relations 
which  exist  between  certain  officers  of  the  navy  and  certain 
officials  in  Nicaragua,  and  the  character  of  the  combination  in 
which  said  officers  are  engaged  against  the  property  and  rights 
of  American  citizens,  the  Company  begs  to  refer  to  an  adver- 
tisement or  notice  which  appeared  in  August,  1886,  in  the 
Nno  York  Herald  and  the  National  Republican  newspapers, 
which  reads  as  follows : — 

"  TO  WHOM  IT  MAY  CONCERN.— From  competent  authority,  by 
request,  I  inform  the  public  that  a  so-called  Atlantic  and  Pacific  Canal 
Company,  having  a  supposed  office  at  No.  1,  Broadway,  New  York,  is  not 
known  to  or  recognised  by  the  Government  of  Nicaragua.  Should  agents 
or  contractors  of  this  alleged  Company  present  themselves  in  Nicaragua, 
they  will  be  repressed.  For  further  information,  address  Daniel  Arnnien, 
Washington,  D.C.  DANIEL  AMMEN." 

This  was  signed  by  Daniel  Ammen,  whose  rank  is  Bear- 
Admiral,  United  States  Navy. 

To  an  impartial  or  judicial  mind  we  believe  the  above  will 
be  proof  conclusive  that  a  Rear- Admiral  of  the  U  S.  Navy  is 
one  of  the  agents  of  a  foreign  Government  seeking  to  restrain 
citizens  of  the  United  States  of  their  legal  rights,  and  actively 


10 

abetting  and  aiding  said  foreign  Government  in  the  sequestra- 
tion of  property  of  great  value,  lawfully  acquired  at  enormous 
expense,  and  legally  owned  by  American  citizens. 

In  order  that  you,  Sir,  may  more  fully  understand  the 
character  of  the  opposition  which  has  employed  the  active 
energies  of  certain  evil-disposed  persons  and  officers  of  the 
U.  S.  Navy  against  the  American  Atlantic  and  Pacific  Ship 
Canal  Company,  wo  beg  to  refer  as  briefly  as  possible,  and  to 
merely  outline  the  record  of  the  official  actions,  various  schemes, 
and  many  adroit  devices  practised  by  these  parties,  now  calling 
their  Association  the  Maritime  Canal  Company  of  Nicaragua. 

In  following  this  brief  outline  of  official  action  of  certain 
officers  of  the  United  States  Navy,  which  is  so  closely  inter- 
woven with  the  history  of  the  so-called  Maritime  Canal  Company 
of  Nicaragua,  under  the  several  aliases  which  they  have 
seen  fit  to  call  their  Association,  it  is  necessary  to  trace 
the  line  of  official  action  of  these  officers  and  persons  in 
the  employ  of  the  United  States,  and  to  enquire  whether  their 
several  actions  were  solely  for  the  good  of  the  public  service 
and  in  the  line  of  their  duties,  or  whether  or  not  it  has  been  an 
adroitly  managed  conspiracy  from  the  year  1872  up  to  the 
present  time  ? 

Have  their  several  acts  as  such  officers  been  for  the 
purpose  and  design  of  acquiring  large  personal  advantages 
and  gains  at  the  expense  of  the  United  States,  and  at  the  cost 
and  spoliation  of  American  citizens  ?  Has  not  a  conspiracy 
existed  and  been  actively  engaged  in  by  the  said  officers 
of  the  Navy  and  other  persons,  their  confederates  ? 

Were  not  the  several  United  States  surveying  expe- 
ditions sent  to  Nicaragua  at  the  sole  expense  of  the  United 
States,  and  which  cost,  such  large  sums  of  money,  insti- 
gated by  them,  as  well  as  directed  and  managed  by  them, 
their  agents  or  friends,  who  co-operated  with  these  said  parties  ? 
And  if  it  be  found  that  they  were  chiefly  instrumental,  through 
their  machinations,  combinations  and  influence  in  the  several 
executive  departments  of  the  United  States  in  the  dispatch  of 
ships  of  the  United  States,  and  expensive  surveying  expeditions 
to  Nicaragua — it  is  pertinent  to  enquire  if  the  ultimate  object  of 


11 

these  parties  was  to  influence  the  Government  of  Nicaragua  to 
treat  with  them  and  grant  them  a  concession  to  build  the  canal 
and  to  get  control  of  the  route  so  expensively  surveyed  hy  the 
Government  of  the  United  States  ?  Furthermore,  were  not  such 
surveys,  which  were  ostensibly  made  by  the  United  States  Navy 
Department  for  the  Government,  really  and  in  fact  intended  by 
these  persons  privately  to  serve  their  personal  ends,  and  to  be 
freely  used  by  them  without  proper  compensation  to  the  United 
States  Government ;  and  have  not  these  parties  so  used 
these  surveys,  plans,  profiles  and  details  in  their  various 
negotiations  ? 

It  may  also  be  pertinent  to  enquire  whether  or  not 
officers  of  the  United  States  Navy,  under  pay,  have  the 
right  to  use  the  property  and  public  money  of  the  United 
States  Government  to  promote  private  schemes  and  companies 
for  personal  gains  ? 

It  is  also  proper  to  enquire  if  the  officers  of  the  United 
States  Navy  and  others  receiving  pay  from  the  United  States 
Government  have  a  right  to  use  their  official  positions  to  oppress 
and  despoil  citizens  of  the  United  States  of  their  vested  rights 
of  property  in  a  foreign  country  ? 

It  may  also  be  reasonably  enquired  if  the  officers  of  the 
United  States  Navy,  and  persons  in  the  pay  of  the  United 
States  Government,  are  permitted  to  act  as  the  agents  and  tools 
of  a  foreign  Government,  or  to  combine,  abet  and  actively  aid 
such  foreign  Government  or  its  officials  in  their  efforts  to 
despoil  American  citizens  of  their  vested  rights,  sequestrate 
the  properties  of  an  American  Company  and  be  the  princi- 
pal receivers  of  such  properties  ?  And  whether  or  not  such 
officers  and  persons  shall  be  permitted,  by  any  stratagem  or 
artfully  devised  act,  to  seize  upon,  occupy  and  use  the  property 
legally  acquired  and  owned  by  citizens  of  the  United  States, 
though  said  property  may  have  been  attempted  to  be  confis- 
cated and  sequestrated  by  a  foreign  Government. 

It  may  also  be  pertinent  to  ask  if  the  officers  of  the  Navy 
and  engineers  and  other  persons,  as  well  as  the  ships  of  the 
United  States,  shall  be  detailed  to  promote  and  to  further 
the  private  schemes  of  such  officers  ? 


12 

Is  it  improper  to  enquire  why  long  leave  of  absence, 
under  pay,  is  granted  to  officers  and  engineers  in  the  Navy 
Department,  where  such  persons  and  officers  are  engaged  in  a 
private  enterprise,  and  in  the  employ  and  pay  of  a  private 
Company  ? 

It  is  pertinent  to  this  enquiry  to  ascertain  if  the 
following  persons,  supposed  to  be  connected  and  interested  in 
said  Maritime  Canal  Company,  are  now  drawing  pay  from  the 
United  States  Treasury  : — 

A.  G.  Menocal,  Chief  Engineer  (United  States  Navy). 

H.  C.  Taylor,  General  Manager  (United  States  Navy). 

J.  W.  Miller,  Secretary. 

E.  E.  Peary,  Second  Chief  Engineer  (United  States  Navy). 

Daniel  Ammen,  United  States  Navy. 

A.  S.  Crowninshield  (United  States  Navy). 
And  others. 

Also  how  many  of  the  following  list  of  engineers  in  the 
employ  of  said  Maritime  Canal  Company  of  Nicaragua  are  upon 
leave  of  absence,  drawing  pay  from  the  United  States  Treasury  ? 


A.  Gr.  Menocal 

E.  E.  Peary 

J.  Francis  Le  Barren 

F.  P.  Davis 
Domingo  G.  Castaya 
I.  W.  Eithards 

G.  Savage 
P.  H.  Bevier 
Eicardo  Molina 
Calixto  Guiteras 


W.  J.  Maxwell 
J.  F.  Perez 
W.  Y.  Alford 
J.  G.  Holcomb 
F.  T.  Bernhard 
H.  C.  Miller 
McD.  Craven 
H.  C.  Litchfield 
E.  N.  Hunt 
J.  T.  Ford. 


The  queries  suggested  above  are  serious,  and  more  than 
compromising,  if  true.  The  documents  in  support  of  such 
suggestions  are  official  publications.  It  is  to  them  we  turn 
in  order  to  trace  the  official  action  and  motives  of  these 
parties.  First  we  will  refer  to  the  year  1872.  See  Senate  ex. 
Doc.  No.  57,  43rd  Congress,  1st  sess.,  1874,  "  Reports  of 
"  Explorations  and  Surveys  for  location  of  a  Ship  Canal  between 
"  the  Atlantic  and  Pacific  Ocean  through  Nicaragua,"  page  33, 
where  we  find  the  following  order  : — 


13 

"  Navy  Department,  Bureau  of  Navigation,  and  Office  of  Detail, 

"  Washington,  October  17,  1872. 

"  Sir, — You  are  hereby  detached  from  special  duty  in  the  Bureau  of 
Yards  and  Docks,  and  on  the  22nd  instant  you  will  relieve  Commander 
Chester  Hatfield  in  command  of  the  Nicaraguan  Surveying  Expedition,  who 
has  been  directed  to  turn  over  to  you  all  orders,  books,  maps,  instruments 
and  information  of  every  kind  pertaining  thereto  in  his  possession.  He  will 
furnish  you  with  memoranda  relating  to  everything  connected  with  the 
expedition  and  its  equipment.  The  results  of  the  expedition,  as  far  as 
obtained  before  the  setting  in  of  the  rainy  season,  are  now  being  brought 
up  at  the  Washington  Navy  Yard.  „ 

"  You  will  complete  this  with  all  convenient  dispatch,  and  make  such 
preparations  in  the  organisation,  and  obtaining  necessary  outfits  of  all  kinds 
as  will  enable  you  to  leave  Hampton  Roads  by  the  1st  of  December  next, 
either  on  board  of  the  "  Kansas  "  or  some  other  national  vessel  that  will  be 
detailed  for  the  purpose. 

"  By  direction  of  the  Secretary, 

"  Respectfully, 
(Signed)        "DANIEL  AMMEN, 

"  Chief  of  Bureau. 

"  Commander  Edward  P.  Lull,  U.S.N., 
"Washington,  D.C. 

(Endorsed.] 

"  Relieved  Commander  Hatfield  and  assumed  command  October  22,  1872. 

"  EDWARD  P.  LULL, 

"  Commander. 
"S.  ex.  57-5." 

Attached  to  the  expedition  thus  ordered  was  Lieutenant 
Jacob  W.  Miller ;  and  Civil  Officer,  A.  GK  Menocal,  Chief  Civil 
Engineer.  Let  us  see  if  the  names  of  these  two  gentlemen,  or 
those  of  Daniel  Ammen  and  Edward  P.  Lull,  again  appear  as 
connected  with  any  canal  scheme  or  concession  thereafter  ? 

This  United  States  exploration  and  surveying  expedition 
proceeded  to  Nicaragua,  and  ran  a  line  of  levels  from  ocean  to 
ocean,  following  the  line  previously  located  by  the  able  engineers 
of  the  American  Atlantic  and  Pacific  Ship  Canal  Company, 
and  having  completed  the  line  of  levels  and  certain 
other  hydrographic  work,  returned  to  Washington  and  pre- 
pared elaborate  reports  in  great  detail.  The  next  step  was  to 
have  these  reports  printed  at  Government  expense,  and  a 
resolution  was  put  though  the  Senate,  the  nature  of  which  is 
explained  by  the  following : — 


14 

"  Navy  Department,  Washington,  June  16,  1874. 

"  Sir,— I  have  the  honour  to  acknowledga  the  receipt  of  an  attested 
copy  of  a  resolution  adopted  by  the  Senate  on  the  13th  inst.,  directing  the 
secretary  of  the  Navy  ( to  furnish  the  Senate  with  the  report  and  maps  of  the 
survey  to  ascertain  a  practicable  route  for  an  interoceanic  ship  canal,  via  the 
Lake  Nicaragua,'  and  in  compliance  therewith  to  herewith  transmit  the 
report  and  maps  called  for. 

"  Very  respectfully,  &c., 

(Signed)  "GEO.  M.  ROBESON, 

"Secretary  of  the  Navy. 
11  Hon.  M.  H.  Carpenter,    * 

"  President  (pro  tempore)  United  States  Senate." 

The  reports  and  details  having  been  printed  at  United 
States  Government  expense,  the  next  thing  done  by  the  gentle- 
men was  to  try  and  get  a  concession  from  the  Government  of 
Nicaragua ;  and  for  whom  and  in  whose  name  was  this  con- 
cession asked  ?  For  no  others  but  these  identical  naval  officers 
and  their  associates !  This  was  brought  about  in  this  wise : 
The  same  Mr.  A.  G.  Menocal,  Civil  Engineer,  United  States 
Navy,  a  member  of,  and  commissioned  by,  the  Provisional  Inter- 
oceanic  Canal  Society, having  obtained  leave  of  absence,  appeared 
in  Nicaragua  and  commenced  active  negotiations  to  obtain  from 
the  Government  of  Nicaragua  for  the  said  Society  a  concession 
to  build  a  canal  across  the  territory  of  Nicaragua.  After 
long  negotiation  and  much  difficulty,  the  said  agent,  by  offer- 
ing and  agreeing  to  give  a  large  block  of  the  capital  stock  of 
the  proposed  Canal  Company,  amounting  to  five  per  cent,  of 
the  whole  capital  to  be  issued,  and  not  to  be  less  than 
$3,000,000  in  amount,  finally  succeeded  in  getting  a  conditional 
contract  or  so-called  concession  from  the  Government.  This 
concession  and  grant  was  signed  upon  the  part  of  the 
Government  of  Nicaragua  by  A.  D.  Cardenas  and  Znvala,  and 
on  the  part  of  the  Society  by  A.  G.  Menocal  (all  again  here- 
after to  appear),  in  this  record. 

As  soon  as  the  concession  was  signed,  the  agent  hastened  to 
Washington,  and  immediately  upon  arrival  repaired  to  the 

State  Department,  and  there  had  a  translation  of  the 
concession  revised  by  the  official  translator  of 
the  State  Department! 


15 
WORKING  THE   U.S.  CONGRESS. 

Immediately  thereafter,  in  1880,  application  was  made  by 
these  parties  to  the  Congress  of  the  United  States  for  a  charter 
for  the  Maritime  Canal  Company  of  Nicaragua.  The  next  suc- 
ceeding steps  are  well  detailed  by  those  who  took  them.  We 
quote  from  a  report  made  by  Provisional  Interoceanic  Canal 

Society,  as  follows  : — 

"  New  York,  March  16,  1883. 

"  To  the  Members  of  tlie  Provisional  Intercoeauic  Canal  Society. 

*'  Gentlemen  :  The  Executive  Committee  deem  it  advisable  to  present 
for  your  consideration  such  facts  relating  to  the  Nicaragua  Canal  project, 
and  the  present  condition  of  that  interest,  as  will  enable  you  to  form 
intelligent  opinions  as  to  the  value  of  the  Society's  franchise,  and  to  ask 
that  your  early  attention  be  given  to  the  subject,  in  order  that  a  course  of 
action  may  be  determined. 

"  PROCEEDINGS  IN  CONGRESS. 

"  In  1880  application  was  made  to  Congress  for  a  charter  for  the 
Maritime  Canal  Company  of  Nicaragua.  The  Tehuantepec  Ship  Railway 
fccheme  so  far  interfered  as  to  delay  the  report  of  the  Committee  in  favour 
of  our  measure  until  too  late  for  further  action  by  Congress  during  that 
session. 

*'  In  1881  a  bill  to  incorporate  the  Company  was  introduced  with  the 
added  feature  of  a  guarantee  by  the  United  States  of  3  per  cent,  yearly  net 
earnings  for  20  years  from  and  after  the  completion  of  the  Canal. 

"  Committees  of  both  Houses  of  Congress  reported  favourably  upon  this 
measure,  the  guarantee  to  attach  only  to  the  actual  cost  of  the  Canal  not 
exceeding  75,000,000  dols.  The  combination  of  opposing  interests,  including 
the  Ship  Railway  scheme,  which  these  reports  developed,  was  very  strong. 

"  The  Bill  came  up  as  unfinished  business  the  past  winter.  A  vote  in 
the  House  of  Representatives  to  consider  it  resulted  in  127  ayes  to  76  noes 
— not  quite  the  requisite  two-thirds'  vote.  The  guarantee  feature  was 
dropped,  it  being  apparent  that  otherwise  no  time  could  be  given  to  the  Bill 
by  that  Congress. 

"  As  the  matter  remains,  two  Committees  adopted  the  feature  of  a 
Government  guarantee.  A  large  majority  of  the  House  practically  voted 
for  the  incorporation,  with  authority  to  issue  100,000,000  dold.  of  stock  and 
50,000,000  dols.  of  bonds. 

"  A  Senate  caucus  more  than  once  selected  the  measure  as  one  of  the 
many  then  pending  to  be  taken  up  and  acted  upon.  This  purpose  was 
defeated  by  the  Tariff  Bill. 

"  The  Executive  branch  of  the  Government  is  very  earnestly  favourable 
to  our  enterprise. 

"INCORPORATION  BY  THE  UNITED  STATES. 
"The  importance  of  an  incorporation  by  the  United  States  .is,  in  fact, 
limited  to  its  effect  in  securing  subscriptions  abroad.     The  United  States, 


16 

by  treaty  with  Nicaragua,  entered  into  June  21,  1867,  are  pledged  to  the 
security  of  any  undertaking  for  an  interoceanic  communication  across  that 
country.  By  this  treaty  the  United  States  extend  their  protection  over 
and  guarantee  the  neutrality,  security,  and  innocent  use  of  all  such  com- 
munications. In  the  event  of  imminent  danger  to  the  lives  and  property 
of  their  citizens,  forces  may  be  landed,  without  the  formality  of  consent  by 
Nicaraguan  authorities,  for  the  protection  of  the  menaced  lives  and 
interests.  (See  the  Treaty.) 

"EXTENSION    OF   TIME   FIXED   IN    THE   CONCESSION. 

"  It  became  necessary  to  petition  the  Government  of  Nicaragua  for  an 
extension  of  the  time  fixed  in  the  concession  for  the  organisation  of  the 
Canal  Company.  Captain  E.  P.  LULL,  U.S.  Navy,  who  had  con- 
ducted the  canal  surveys  in  that  country,  went  out  as  the  representative 
of  the  Society,  and  secured  an  extension  to  September  30,  1884. 

«  PRESENT  STATUS  OF  THE   PROJECT. 

"The  political  events  of  the  past  year  and  the  change  in  party  control  in 
the  next  Congress  make  it  doubtful  that  any  legislation,  beyond  an  act  of 

incorporation,  can  be  secured  from  that  body. 

******** 

"  The  interests  of  the  Society  are  large,  and  every  member,  whatever  the 
demands  upon  his  time,  may  well  exert  himself  to  secure  attention  of 
financial  men  to  the  merits  of  the  enterprise. 

"  Attention  is  invited  to  a  copy  of  the  appended  Report  of  the  Com- 
mittee  on  Foreign  Affairs  of  the  House  of  Representatives,*  and  to  the 
appended  article  of  Dr.  Bransford,  United  States  Navy. 
"  (Signed) 

"SETH   L.   PHELPS, 

«  FREDRIC  BILLINGS, 
"GEORGE  B.   LORING, 
"  ALEXANDER  TAYLOR, 
"DANIEL  AMMEN, 

<l  Executive  Committee." 

It  will  be  seen  from  the  signatures  of  the  Executive  Com- 
mittee, that  DANIEL  AMMEN,  Rear-Admiral,  U.S.N., 
SETH  L.  PHELPS,  United  States  Minister  to  Peru,  and 
GEORGE  B.  LOSING-,  were  all  in  the  Government  employ. 
Alexander  Taylor  and  Frederick  Billings  were  not. 

It  is  further  to  be  noted  that  Commander  E.  P.  Lull,  U.S.N., 
is  the  Agent  engaged  to  negotiate  for  the  Company,  in  order 
that  his  prestige  and  authority  in  Nicaragua  as  an  officer  of 
the  United  States  Navy  might  be  turned  to  the  account  of  the 
Interoceanic  Canal  Society.  Was  he  not  selected  by  Admiral 
Ammen  in  order  to  do  this  very  thing  ?  Does  not  this  fact  clearly 

*  47  Congress,  1st  Sess,,  Report  No.  1698,  July  21,  1882, Nicaragua  Canal. 


17 

establish  the  complicity  and  design  of  these  officers  in  organis- 
ing and  persistently  conducting  a  conspiracy  from  the  year  1872  ? 
Accompanying  and  forming  part  of  said  report  of  this 
Executive  Committee  was  an  elaborate  report  in  great  detail; 
including  estimates  of  cost  of  construction,  an  expensively  pre- 
pared plan  and  profile  map  of  the  proposed  canal,  under  the 
following  title  :  — 

"PLAN    AND    PROFILE 

OF    THE 

-NICARAGUA      SHIP      CANAL, 

"FROM  SURVEYS  BY  THE  U.S.  SURVEYING-  EXPEDITION  OF  1872-73 
"AND  ADDITIONAL  SURVEYS  IN  1876-77  AND  1880, 

BY 

"A.  GK  MENOCAL,  CITIL  ENGINEER,  TJ.S.N. 
1882. 


-SCALE 

The  report  further  says  :  — 

"ESTIMATED  COST. 

"  The  estimates  on  which  calculations  of  cost  have  hitherto  been  based 
were  made  ten  years  ago  by  the  United  States  surveyor,  since  which  time 
excavators,  dredgers,  appliances,  and  explosives  have  all  been  greatly 
improved  and  the  cost  of  the  work  thereby  diminished  ..... 

"  The  actual  cost  of  masonry  and  concrete  on  W.  S.  R.  R.  is  much  less 
than  Mr.  Menocal's  estimated  cost,  with  no  advantage  as  to  materials.  .  . 

"  Having  in  view  the  above  facts,  we  can  feel  great  confidence  in  the 
results  of  comparison  with  estimates  of  well-known  engineers  of  the 

army.     .    .     ." 

"  ESTIMATES. 

"  General  Gilmore  and  Major  Craighill,  of  the  Engineer  Corps,  prepared 
estimates  respectively  for  a  ship  canal  across  Florida  and  for  one  between 
Chesapeake  and  Delaware  Bays.  They  compare  as  follows  with  those  for 
the  Nicaragua  Canal  prepared  by  Mr.  Menocal.  .  .  ." 

This  report  fully  establishes  how  and  by  whom,  and 
for  whose  benefit,  these  expensive  Surveys,  Plans,  Maps, 
Profiles,  Details,  Reports,  and  Estimates  have  been  used. 
The  foregoing  records  are  only  a  few  of  the  many  proofs 
at  hand  to  show  that  these  Plans,  Surveys,  Estimates, 
Details,  Reports,  and  Maps,  although  ostensibly  made  by  the 
United  States  Navy  Department  for  the  Government,  have  in 
reality  been  used  and  employed  by  these  parties  in  the 
furtherance  of  their  scheme. 


18 

It  is  not  necessary  to  make  further  enquiry  as  to  who  insti- 
gated, inspired,  commanded  and  directed  the  three  United 
States  Navy  Surveying  Expeditions  for  the  canal  route  in 
Nicaragua,  or  for  whose  use  all  this  expense  incurred  by  the 
United  States  was  designed.  These  statements  of  their  Executive 
Committee  are  quite  sufficient ;  no  further  explanations  are 
required  from  these  naval  officers. 

These  surveys,  and  the  supposed  ability  of  these  adroit 
gentlemen  to  work  the  United  States  Congress,  reach  the 
official  ear  of  the  Departments,  employ  the  Navy  Depart- 
ment with  its  ships,  and  use  the  United  States  Treasury 
in  the  furtherance  of  their  various  schemes,  together 
with  large  blocks  of  the  worthless  stock  of  the  proposed 
Maritime  Canal  Company  of  Nicaragua  (a  few  shares  of  which 
have  been  placed  where  they  will  do  the  most  good),  and  other 
elements  of  usefulness,  such  as  an  easy  conscience,  and  health 
sufficient  to  draw  their  monthly  pay  from  the  United  States 
Treasury,  are  the  assets  that  up  to  a  few  months  ago  constituted 
about  all  the  stock-in-trade  of  this  so-called  Maritime  Canal 
Company  of  Nicaragua. 

In  this  record  do  we  not  find  proof  conclusive  how  every 
Executive  Department  of  the  Government — the  State  Depart- 
ment, the  Treasury  Department,  the  Navy  Department,  its 
officers,  men  and  ships,  Cabinet  Ministers,  Committees  of  both 
Houses  of  Congress — have  been  and  are  now  being  worked  for 
the  benefit  of  these  adroit,  long-headed  manipulators  of  depart- 
mental secrets  and  governmental  influence  ? 

It  will  also  be  remarked  from  the  above  report  of  the 
Executive  Committee  of  the  Provisional  Interoceanic  Canal 
Society  that  these  parties  had  managed  the  Committees  of  both 
Houses  of  Congress  in  a  very  able  manner,  and  secured  just 
such  a  report  as  would  suit  their  purpose,  though  the  amount  was 
cut  down  from  a  guarantee  on  $150,000,000  to  a  guarantee  upon 
the  actual  capital  required  to  build  the  Canal,  not  to  exceed 
$75,000,000. 

This  guarantee  was  3  per  cent,  yearly  for  twenty  years, 
or  a  total  liability  of  the  United  States  of  $45,000,000,  for 
which  the  credit  of  the  United  States  was  to  be  pledged  for 
the  benefit  of  these  fine  workers  in  Congressional  Committees. 


19 

The  guarantee,  if  the  Bill  had  passed,  would  have  un- 
doubtedly enabled  these  parties  to  float  their  entire  proposed 
capital  of  $150,000,000,  of  which  $75,000,000  would  be  clear 
profit  to  the  ring.  But  this  fine  "  Credit  Mobilier  "  scheme 
became  so  unpopular  that  its  promoters  thought  best  to  drop 
the  guarantee  clause  and  defer  that  to  some  future  Congress, 
and  fight  only  for  the  incorporation  clause ;  but  an  untimely 
frost  of  an  over- worked  Congress  again  nipped  their  plan  in 
the  bud. 

But  these  parties  again  put  in  their  annual  appearance  when 
Congress  met  in  the  session  of  1883-81,  and  we  see  once  more  the 
Bill  to  incorporate  the  Maritime  Canal  Company  of  Nicaragua 
on  the  rolls  of  both  Houses  of  Congress. 

In  the  meantime,  the  years  1880-81-82-83  had  passed,  and 
nothing  had  been  done  in  Nicaragua  on  the  work]  of  their 
contract,  and  the  year  1884  was  fast  slipping  away,  and  on  the 
30th  day  of  September,  1881,  their  so-called  concession  would 
expire  by  limitation  if  nothing  was  done. 

Their  Companies  had  no  means ;  their  last  resource  was 
the  United  States  Congress,  and  they  redoubled  their  energy 
to  get  money  through  this  source. 

Their  approach  through  Congress  to  the  National  Treasury 
this  time  was  not  with  that  confident,  bold  and  defiant 
demand  of  former  sessions,  and  their  requirements  from 
Congress  were  not  so  onerous  as  in  former  Bills ;  in  fact,  though 
the  sum  demanded  was  only  $250,000  cash  in  hand, and  this  small 
sum  by  the  side  of  the  colossal  guarantee  of  the  previous  year 
seemed  a  mere  pittance, — yet  $250,000  would  save  their  so-called 
concession,  and  have  it  they  must  out  of  the  Treasury  of  the 
United  States  if  it  were  possible  to  be  gotten.  Now  comes 
perhaps  the  most  remarkable  record  of  legislative  legerdemain 
in  the  history  of  Congress. 

These  parties,  knowing  full  well  that  their  Company  had 
not  the  slightest  claim  upon  the  Treasury  of  the  United  States 
or  to  public  confidence,  and  knowing  they  could  not  get  an 
Act  of  Congress  authorising  the  payment  of  such  a  sum  to 


20 

them  under  any  known  pretext,  or  in  a  plain  Bill  stating  for 
what  purpose  and  for  whom  wanted ;  they  resorted  to  one 
of  the  most  shameful  plots  ever  reported  in  legislative  action. 
The  plan  adopted  by  them  and  their  confederates  in  the 
United  States  Senate  was  as  follows : — An  attempt  was  made 
to  conceal  the  purpose  of  the  appropriation  of  $250,000,  and  to 
smuggle  that  amount  out  of  the  Treasury  under  an  item  in  the 
Appropriation  Bill  under  the  following  heading  (vide  Con- 
gressional Eecord  of  Feb.  22,  1887,  page  2167)  :- 

"  To  meet  the  necessary  expenses  attendant  upon  foreign  intercourse 
to  be  expended  under  the.  direction  of  the  President,  pursuant  to  the 
requirements  of  Section  291  of  the  Revised  Statutes,  3250,000, 
or  so  much  thereof  as  may  be  necessary." 

The  Congressional  Record,  Feb.  22,  1887,  partially  explains 
this  extraordinary  transaction  of  the  Senate.  We  reprint  from 
pages  2167  and  2168  the  discussion  in  the  Senate  on  this 
matter,  which  is  as  follows :  — 

"  Mr.  VAN  WYCK.  Mr.  President,  the  discussion  between  the  Senator 
from  Vermont  and  the  Senator  from  Missouri  starts  a  memory  and  suggests 
a  question.  Nearly  three  years  ago  we  had  under  discussion  a  proposition 
to  appropriate  $250,000  to  be  paid  to  somebody  in  Nicaragua  for  the 
purpose  of  some  canal.  May  I  ask  which  one  of  these  projects  that 
$250,000  was  intended  for  ?  Does  the  Senator  from  Vermont  recollect 
that  circumstance  ? 

"  Mr.  EDMUNDS.     Not  either  of  them  as  far  as  I  recollect. 

«  Mr. VAN  WYCK.  That  $250,000  was  not  intended  for  either  of  these 
scheme3.  Every  time  we  discuss  the  project  of  a  canal  to  connect  the  two 
oceans,  or  a  ship-railway  to  connect  the  two  oceans,  it  is  said  we  must  do 
it  at  once,  because  the  opportunity  is  slipping  away.  I  remember  when 
this  $250,000  proposition  was  to  be  paid  out  of  the  Treasury  for  the  benefit 
of  some  canal  in  Nicaragua — I  do  not  know  whether  it  would  be  in  order 
now  to  say  what  took  place  in  executive  session  three  years  after  it  passed. 

"  Mr.  EDMUNDS.     I  do  not  think  it  would  be. 

"  Mr.  VAN  WYCK.  Not  in  order.  I  supposed  the  Senator  would  say 
that,  and  I  presume  the  Chair  concurs  in  the  opinion  of  the  Senator  from 
Vermont. 

"Mr.  MORGAN.  You  may  speak  of  what  occurred  in  legislative  session. 

"  Mr.  VAN  WYCK.  If  it  is  not  proper  three  years  afterward  to  refer 
to  what  occurred  in  executive  session,  then  I  will  refer  to  the  current 
history  of  those  times  as  it  appeared  in  the  newspapers.  I  suppose  that  is 
in  order. 


21 

"  That  is  the  memory  which  is  started  by  this  discussion.  I  remembar 
we  were  told  then  there  was  a  concession,  so  the  papers  stated,  for  some 
purpose  in  Nicaragua  ]  list  slipping  our  grasp.  I  think  it  ran  out  in  the 
following  October,  we  were  told. 

"  There  was  a  great  Nicaragua  concession.  It  was  hugely  important. 
Patriotism  bubbled  all  over  ;  generosity  and  humanity  were  invoked  for  the 
benefit  of  mankind,  as  usual  on  such  occasions ;  and  we  must  secure  it  at 
once.  Here  was  this  great  concession,  and  the  Treasury  must  be  put  under 
subjection  again  to  pay  out  the  amount  of  $250,000.  For  what  ?  The 
public  tried  to  find  out.  For  what  ?  For  this  concession,  and  we  were 
immediately  plunged  into  the  dark  and  hidden  recesses  of  a  secret  session 
on  this  subject,  which  was  not  to  be  discussed  before  the  American  people  ; 
and  yet  it  was  a  proposition  which  affected  the  people  in  their  business 
relations,  a  canal  through  Nicaragua,  and  only  wanted  $250,000  to  be 
taken  out  of  the  Treasury.  The  people  should  know,  but  no,  that  would 
not  do. 

"  Mr.  President,  it  may  be  well  to  look  back.  That  was  only  three 
years  ago.  That  concession  was  slipping  away.  The  Senate  voted  it  in  its 
liberality  on  that  occasion  the  $250,000,  but  I  think  it  was  defeated  in  the 
other  House,  if  rny  recollection  serves  me.  Now  I  am  anxious  to  know  to 
what  that  applied.  There  was  a  sensation.  We  were  called  upon  to  pay 
$250,000.  Now  we  have  two  projects  here.  The  Senator  from  Vermont 
says  that  the  $250,000  applied  to  neither  of  these,  neither  to  his  Bill  nor  to 
the  incorporation  which  the  Senator  from  Missouri  refers  to.  Is  there 
another  1  Will  some  member  of  the  Committee  on  Foreign  Relations  tell 
us  whether  there  was  another  Nicaragua  scheme  at  that  time,  three  years 
ago  1  Does  the  recollection  of  the  Senator  from  Vermont  serve  him  as  to 
that  point,  whether  there  was  another  Nicaragua  scheme  at  that  time  that 
we  were  called  upon  to  pay  $250,000  for  ?  The  Senator  from  Massachusetts, 
I  believe,  does  not  remember  any  other  Nicaraguan  scheme. 

"  Mr.  HOAR.  My  memory  is  so  bad  that  I  do  not  remember  anything 
about  it. 

"  Mr.  VAN  W5TCK.  The  Senator  is  so  very  familiar  with  getting  across 
mountains  and  valleys  and  rivers  between  the  Atlantic  and  the  Pacific  that 
I  supposed  he  would  probably  remember  how  many  schemes  there  were 
to  dig  through  the  mountains  and  get  landed  on  the  sweet  Pacific. 

"  Well,  I  will  read  from  the  CONGRESSIONAL  RECORD.  It  is  instructive, 
I  know.  Let  us  see  whether  we  can  get  any  information  there.  Who  are 
the  projector?,  friends,  and  advocates  of  these  various  schemes  ?  It  seems 
the  one  my  friend  from  Missouri  talks  about  is  only  half  a  century  old,  and 
he  remembers  all  about  that ;  but  the  scheme  of  three  years  ago,  the 
Foreign  Relations  Committee,  and  the  friends  of  all  these  great  projects,  do 
not  remember.  My  friend  from  Missouri,  in  view  of  the  national  greatness  of 
the  United  States  involved  in  his  favourite  scheme  for  a  ship-railway  at 
Tehuantepec,  was  willing  to  let  it  go  without  protection  to  the  stockholders 


22 

or  the  bondholders.  Now,  it  may  refresh  gentlemen's  recollection  probably 
if  we  go  back  three  years,  because  when  we  were  called  upon  to  make  a 
contribution  of  a  quarter  of  a  million  dollars  to  help  somebody  or  help 
something  it  was  so  important  that  it  must  be  done  at  once.  And  yet  it 
has  drifted  away  from  the  memory  of  everybody  in  the  Senate  who  had  any 
interest  in  it. 

The  CHIEF  CLERK.  After  line  615  the  Senate,  as  in  Committee  of  the 
"Whole,  inserted  the  following  clause  : 

"  To  meet  the  necessary  expenses  attendant  upon  foreign  intercourse,  to 
be  expended  under  the  direction  of  the  President,  pursuant  to  the  require- 
ment of  section  291  of  the  Revised  Statutes,  $250,000,  or  so  much  thereof  as 
may  be  necessary." 

"It  was  pretty  well  hidden  here  under  circumlocution  and  as  to  the  law 
under  which  it  was  to  be  applied. 

Mr.  VEST.  An  examination  of  the  consular  and  diplomatic  appropriation 
Bills  in  the  previous  history  of  the  Government  will  develop  the  fact  that 
antecedent  to  this  time  the  largest  appropriation  ever  made  to  meet  the 
expenses  to  be  incurred  under  the  direction  of  the  President  in  the  execution 
of  the  Neutrality  Act  has  been  $20,000.  This  appropriation  reaches  the  amount 
of  §250,000.  It  is  an  extraordinary  appropriation.  It  is  due  to  the  country 
and  to  the  Senate  that  the  Committee  on  Appropriations  should  state  before 
the  American  public  why  this  enormous  amount,  in  proportion,  or  relatively, 
is  now  asked  at  the  hands  of  the  representatives  of  the  people. 

I  undertake  to  say  in  my  place  in  the  Senate  that  for  the  execution  of  the 
Neutrality  Act  this  amount  is  not  to  be  appropriated  as  it  has  been  in  former 
Appropriation  Acts.  I  undertake  to  say  that  upon  the  contrary  it  is  for  an 
extraordinary  purpose,  and  it  is  due  to  the  Senate  that  the  chairman  of  the 
committee  should  state  what  that  purpose  really  and  honefetly  is.  I  call  upon 
the  chairman  of  the  committee  to  make  that  statement.  What  is  the  real 
purpose  of  this  appropriation  ? 

The  PRESIDING  OFFICER.  The  question  is,  Will  the  Senate  concur  in  the 
amendment  made  as  in  Committee  of  the  Whole  ? 

Mr.  VAN  WYCK.  I  desire  to  propose  the  following  amendment,  to  come  in 
at  the  end  of  the  committee  amendment : 

"  But  no  portion  of  said  §250,000  shall  be  paid  directly  or  through  the 
Nicaraguan  Government  to  the  owners  of  a  concession  granted  to  the  Maritime 
Canal  Company  of  Nicaragua." 

"  What  is  the  Maritime  Canal  Company  of  Nicaragua  ?  That  was  the 
amendment.  Now,  I  may  be  excused  for  referring  to  these  concessions. 
Who  would  have  believed  that  any  legislative  body  on  earth,  when  a  pro- 
position of  that  kind  was  made,  would  attempt  to  hedge  by  getting  into 
a  secret  session  ? 

Mr.  ALLISON.     Mr.  President,  I  move  to  lay  that  amendment  on  the  table. 
My  Amendment — 

Mr.  VAN  WYCK.     Mr.  President 

Several  SENATORS.     It  is  not  debatable. 
The  PRESIDING  OFFICER.     What  was  the  motion  ? 
Mr.  ALLISON.     I  moved  to  lay  that  amendment  on  the  table. 
Mr.  VAN  WYCK.     Mr.  President,  I  had  the  floor. 

The  PRESIDING  OFFICER.  The  Senator  from  Iowa  moves  that  the  amend- 
ment be  laid  on  the  table. 

Mr.  ALLISON.     The  Senator  from  Nebraska  had  taken  his  scat. 
Mr.  INGALLS.    I  saw  him  take  his  seat. 

(Laughter.) 


23 

"  It  is  amusing,  because  the  American  Senate  have  forgotten  three  years, 
and  see  the  sort  of  performance  to  get  matters  which  should  be  openly 
discussed  and  known  to  the  nation,  hidden  away  in  a  hole  in  the  wall  in 
secret  session. 

Mr.  VAN  WYCK.     I  desire  to  know 

Mr.  INGALLS  and  others.     Order  ! 

The  PRESIDING  OFFICER.  The  Chair  will  take  care  of  !he  question.  The 
Senator  from  Iowa  was  recognised,  and  the  Senator  from  Iowa  moved  to  lay 
the  amendment  on  the  table.  With  what  object  does  the  Senator  from 
Nebraska  rise  ? 

Mr.  VAN  WYCK.  I  had  the  floor  and  offered  the  amendment.  I  offered 
the  amendment 

The  PRESIDING  OFFICER.  The  Chair  had  recognised  the  Senator  from 
Iowa  (Mr.  ALLISON). 

Mr.  VAN  WYCK.     Very  well,  sir. 

The  PRESIDING  OFFICER.    The  Senator  from  Nebraska  had  yielded  the  floor. 

Mr.  VAN  WYCK.  Then  I  ask  the  gentleman  to  withdraw  the  motion  for  a 
few  moments. 

"  Of  course  that  would  not  be  done  ;  and  then  a  vote  was  taken  ;  and  I 
see  I  voted  "ay"  with  the  gentlemen.  Then  this  followed  : 

The  PRESIDING  OFFICER.  DOGS  the  Senator  from  Iowa  withdraw  his 
motion  ? 

Mr.  ALLISON.     I  do  not,  Mr.  President. 

The  PRESIDING  OFFICER.  The  Senator  from  Iowa  declines  to  withdraw 
the  motion  to  lay  on  the  table.  The  question  is,  Will  the  Senate  agree  to  the 
motion  ? 

The  motion  was  agreed  to. 

Mr.  VAN  WYCK.  Mr.  President,  I  voted  "ay"  on  this  motion,  and  I  desire 
now  to  make  a  motion  for  a  re-consideration  of  the  vote  just  taken. 

Mr.  ALLISON  rose. 

Mr.  VAN  WYCK.  I  do  not  yield  the  floor  just  at  this  moment,  I  say  to 
my  friend  from  Iowa; 

The  PRESIDING  OFFICER.     The  Chair  entertains  the  Senator's  motion. 

Mr.  VAN  WYCK.     My  motion  is  to  re-consider  the  vote  just  taken. 

The  PRESIDING  OFFICER.     So  the  Chair  understands. 

Mr.  MORRILL.     It  is  subject  to  the  same  rule,  however. 

Mr.  VAN  WYCK.     I  have  the  floor,  I  believe. 

The  PRESIDING  OFFICER.     The  Senator  from  Nebraska  has  the  floor. 

Mr.  ALLISON.     I  rise  to  a  privileged  question,  a  question  of  order. 

The  PRESIDING  OFFICER.  The  Senator  from  Iowa  will  state  his  question 
of  order. 

Mr.  ALLISON.  I  move  that  the  Senate  proceed  to  the  consideration  of  this 
question  under  Eule  XXXV. 

Mr.  MILLER,  of  California.     I  second  the  motion. 

"  And  thereupon  the  doors  were  closed  under  Eule  XXXV.  and  the 
matter  was  considered  in  secret  session. 

"  How  now?  It  seems  my  amendment  was  to  prevent  this  $250,000 
from  being  appropriated  to  the  Nicaraguan  Government  and  to  the  owners 
of  a  concession  granted  to  the  Maritime  Canal  Company  of  Nicaragua.  That 
was  where  we  stood  three  years  ago.  Which  is  the  project  that  applied  to  1 
If  that  name  is  not  in  some  of  these  Bills  it  is  remarkable.  We  were  then 
told  that  the  only  thing  to  save  that  concession  was  to  vote  $250,000  out  of 
the  Treasury.  Fortunately  the  House  prevented  its  being  voted,  and 
therefore  we  saved  the  $250,000,  and  it  seerns  the  concession  has  not  gone 


24 

yet.     Is  that  the  nama  of  either  of  the  two  companies  who   appear  here 
to-day?     That  establishes  that  point. 

"  Then  another  very  remarkable  fact.  The  Senate  went  into  secret  session 
on  that  amendment,  and  when  we  came  out  into  open  session  the  question 
then  was,  '  shall  this  Bill  pass1?'  It  had  got  to  its  final  passage  almost, 
except  the  vote,  in  this  executive  or  secret  session.  When  the  doors  were 
opened  the  Chair  stated  : 

The  question  now  before  the  Senate  is,  the  Bill  having  been  read  three 
times,  shall  it  pass  ? 

"  I  remember  then  making  some  suggestions  in  regard  to  that  matter. 
We  had  acted  on  that  amendment,  not  before  the  people,  and  came  into  open 
session  on  the  passage  of  the  Bill.  It  is  not  proper  for  me  to  state  what 
occurred  in  executive  session,  but  I  can  state  what  appears  from  the  public 
papers. 

"It  is  time  to  emphasize  the  fact  that  it  was  necessary  to  go  into  an 
executive  session  to  hide  the  purpose  of  this  appropriation  of  $250,000. 
That  was  done  without  telling  it  to  the  public  and  to  the  world.  But 
evidently  the  object  of  the  appropriation  that  was  proposed  was  to  pay 
this  money  out  to  the  parties  having  this  concession  under  the  pretence 
that  it  might  lapse  in  October ;  and  yet  the  money  was  not  paid  and 
evidently  the  concession  is  not  gone,  because,  I  suppose,  if  you  run  over 
the  list  of  corporations  here  you  will  find  this  Maritime  Canal  Company. 
I  do  not  know  what  is  the  title  of  the  Bill  now  under  consideration. 
I  have  not  looked  at  it.  A  friend  of  mine  hands  it  to  me.  Here  it  is  : 
'  To  incorporate  the  Maritime  Canal  Company  of  Nicaragua.'  It  seems 
to  be  the  same  thing.  '  It  is  the  Monsieur  Tonson  come  again.'  It  did  not 
disappear  in  October,  1884,  as  we  were  told  it  would  if  we  failed  to 
appropriate  the  quarter  of  a  million. 

"  Thus  it  seems  that  there  is  no  danger  of  losing  the  chance  of  connecting 
the  waters  of  the  Atlantic  and  the  Pacific,  or  making  a  canal  between 

the  two." 

#  *  #  *  # 

WORKING   THE    STATE    DEPARTMENT. 

The  House  of  Representatives  struck  out  this  Senate  item, 
and  the  snug  little  sura  of  $250,000  was  not  handed  over  to  the 
Maritime  Canal  Company  and  their  so-called  concession 
lapsed.  But  had  it  not  expired,  the  American  Atlantic  and 
Pacific  Ship  Canal  Company  would  have  taken  action  in  the 
proper  tribunal  against  said  Company  to  have  their  conces- 
sion declared  unconstitutional  and  legally  void.  And  the 
American  Atlantic  and  Pacific  Ship  Canal  Company  was  then 
making  every  preparation  to  commence  the  work  upon  its 
canal  in  Nicaragua,  and  so  notified  the  Government  of 


23 

Nicaragua,  through  its  Minister,  General  Zavala,  as 
also  the  Secretary  of  State  of  the  United  States  in  a 
communication  made  by  the  Company  to  the  Secretary,  of 
date  September  29th,  1884,  and  would  have  commenced  work 
but  for  the  action  of  the  Secretary  of  State,  Mr. 
Frelinghuysen,  who  was  then  negotiating  a  treaty  with 
the  Minister  of  Nicaragua,  and  before  the  Company 
could  despatch,  its  engineers  and  labourers  to  Nicaragua  the 
Secretary  of  State  had  signed  a  treaty  with  the  Minister  of 
Nicaragua.  And  the  Company  bas  been  informed  that  by  the 
terms  of  that  most  marvellous  treaty  the  United  States  under- 
took to  build  the  Canal  at  the  sole  expense  of  the  Government 
of  the  United  States,  for  the  joint  ownership  of  the  United 
States  and  Nicaragua ;  and  also  agreed  to  advance  as  a  loan 
to  Nicaragua  the  sum  of  $1,000,000.  If  this  was  the  proposition 
of  the  Secretary  of  State,  it  was  certainly  beyond  the  wildest 
dream  of  Nicaragua  in  its  advantages  for  that  State.  This  treaty 
is  most  remarkable,  because  the  Secretary  of  State,  in  his  desire 
and  determination  to  construct  this  Canal  by  the  United  States 
Government,  recklessly,  autocratically,  and  unceremoniously 
proposed  to  despoil  this  Company  of  its  vested  rights  and 
property  of  great  value,  and  to  annul  the  Clay  ton-Bui  wer 
treaty  and  public  Acts,  which  for  35  years  had  been  regarded 
as  binding  by  the  Governments  and  parties  at  interest.  This 
treaty  was  a  most  formidable  obstruction  thrown  in  front  of 
the  American  Atlantic  and  Pacific  Ship  Canal  Company,  too 
powerful,  in  fact,  to  be  ignored  or  lightly  considered,  and 
therefore  this  Company  at  once  took  steps  to  prevent  if  possible 
the  confirmation  of  that  treaty  by  the  Senate,  and  immediately 
(Dec.  3,  1884)  pretested  against  the  ratification  of  the  same 
by  the  Senate.  The  treaty  was  rejected  by  the  Senate  and 
was  eventually  withdrawn  by  your  Excellency  from  further 
consideration  of  the  Senate. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company, 
on  the  13th  day  of  November,  1885,  legally  executed  and 
delivered  to  the  trustee,  who  has  received  the  same  and  under- 
taken to  execute  the  trust  thereby  reposed  in  him,  a  deed  of 
mortgage  for  $100,000,000,  which  deed  is  made  a  first  lien 
and  mortgage  upon  this  Company's  ship  canal,  right  of  way, 


26 

water  channels,  streams,  lands,  houses,  tenements,  and  heredita- 
ments, and  all  other  property,  rights,  and  franchises  of  this 
Company,  in  said  State  of  Nicaragua,  more  fully  set  forth  in 
said  deed  of  mortgage. 

Prior  to  the  expiration  of  the  concession  given  to  the  Provi- 
sional Interoceanic  Canal  Society,  these  parties,  Ammen 
et  al,  had  organised  themselves  as  a  corporation  under  the  statute 
laws  of  the  State  of  Colorado,  under  the  style  and  name  of 
The  Maritime  Canal  Company  of  Nicaragua.  But  their 
concession  having  expired  on  the  30th  of  Sept.,  1884,  as  before 
stated,  it  was  thought  we  would  hear  nothing  more  of 
them.  But  the  debate  in  the  United  States  Senate  (see 
Congressional  Record,  Feb.  22,  1887,  page  2166)  developed 
that  certain  parties  opposed  the  negotiation  of  the  treaty  with 
Nicaragua.  Senator  Edmunds  says  : 

"  *  *  *  *  I  do  not  remember  their  names.  Undertook  to  tell  the 
Secretary  of  State  that  if  he  would  withhold  the  $750,000,  or  whatever 
it  was  that  they  were  to  have,  then  they  would  consent  that  the  treaty 
might  be  negotiated.  But  it  stood  upon  that  State  Charter,  and  I  presume 
it  is  this  very  one." 

Whether  these  parties  representing  the  Maritime  Canal 
Company,  having  failed  to  get  the  $250,000  to  save  their 
concession,  then  opposed  the  negotiations  of  the  treaty  and 
approached  the  Secretary  of  State  and  offered  to  sell  out  their 
opposition  for  the  sum  of  $750,000,  the  officers  of  the  American 
Atlantic  and  Pacific  Ship  Canal  Company  have  no  means  of 
knowing.  But  the  Maritime  Canal  Company  of  Nicaragua  is 
the  only  Company  having  a  Charter  under  the  statute  laws  of 
one  of  the  States  of  the  United  States  for  the  purpose  of 
building  a  canal  in  Nicaragua,  so  far  as  we  are  informed. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
was  incorporated  by  special  Act  of  Congress  of  the  State  of 
Nicaragua,  and  has  no  chartered  rights  or  corporate  powers 
from  any  State  of  the  Union;  and  the  officers  of  this  Company 
beg  to  state,  in  the  most  unequivocal  manner,  that  no  authorised 
agent  or  person  representing  this  Company  ever  approached 
the  Secretary  of  State  with  any  such  proposal  or  demand  for 
any  sum  of  money  whatever  ;  and  the  American  Atlantic  and 
Pacific  Ship  Canal  Company  has  never  made  any  demand  upon 


27 

the  United  States  Government  for  money  or  assistance  of  any 
kind  in  the  building  of  their  canal,  and  they  do  not  now  ask 
any  assistance  of  any  nature  whatsoever.  This  Company  is 
prepared  to  construct  its  canal  without  Government  aid. 

But  this  Company  has  been  compelled,  against  its  wish,  to 
appear  more  than  once  before  the  Congress  of  the  United 
States  in  order  to  protect  its  vested  rights  of  property  in  a 
foreign  State,  and  this  Company  has  been  forced  to  protest 
against  the  passage  of  Bills  introduced  in  both  Houses  of 
Congress  to  incorporate  the  Maritime  Canal  Company  of 
Nicaragua. 

By  the  terms  of  the  Frelinghuysen  Treaty  two  years  was 
agreed  upon  as  the  limit  of  time  allowed  for  its  ratification  by 
the  Senate,  and  the  American  Atlantic  and  Pacific  Ship  Canal 
Company  deemed  it  prudent  and  proper  to  wait  until  the  treaty 
expired,  which  brought  the  date  down  to  December,  1886. 

In  the  meantime  the  "Navy  Ring"  again  put  in  their 
annual  appearance  with  the  Session  of  Congress,  and  although 
they  had  no  concession  or  contract  of  any  kind  with  the  Govern- 
ment of  Nicaragua,  yet  we  find  them  again  before  Congress 
with  a  Bill  to  incorporate  the  Maritime  Canal  Company  of 
Nicaragua.  This  Bill  was  introduced  by  Senator  Edmunds, 
June  10th,  1886,  but  did  not  become  a  law  ;  and  during  the 
winter  session  of  1886-7  these  naval  lobbyists  again  haunted 
the  corridors  of  the  Capitol.  They  this  time  secured  the  active 
services  and  co-operation  of  the  Senator  from  Vermont,  who 
rushed  forward  with  patriotic  fervour  to  aid  in  putting  into 
Nicaragua  a  company  or  "  ring  "  that  had  no  contract  or  conces- 
sion from  the  Government  of  that  State,  and  who  had  never  spent 
one  dollar  of  their  own  money  on  the  Canal  route. 

And  by  this  measure  he  proposed  to  turn  out  of  Nicaragua 
the  American  Atlantic  and  Pacific  Ship  Canal  Company, 
having  a  charter  of  perpetual  succession  and  an  existing  con- 
tract with  that  republic,  and  the  shareholders  of  which  Company 
had  inalienable  rights  of  property  to  the  Canal  route  across  that 
State,  and  had  spent  millions  of  dollars  on  this  transit  route 
and  in  its  operation. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
protested  against  the  passage  of  the  Bill,  but  Senator  Edmunds, 


28 

had  made  his  combination  strong  enough,  was  deaf  to  protest,  and 
drove  his  measure  through  the  Senatei-The  cohesion  of  plunder 
prevailed  ! 

The  Bill  passed  the  Senate  by  a  bare  majority  and  under 
very  damaging  disclosures.  The  Senate  Bill  was  hurriedly 
engrossed  and  rushed  into  the  House  of  Representatives,  and 
on  being  reported  to  the  House,  was  referred  to  the  Committee 
on  Commerce,  and  there  the  managers  of  this  iniquitous  Bill  had 
to  face  the  old  American  Atlantic  and  Pacific  Ship  Canal 
Company,  who  appeared  by  counsel  to  oppose  the  report  by  that 
committee,  of  the  Senate  Bill. 

After  one  meeting  of  the  Committee,  and  the  damaging 
exposure  of  the  measure  by  the  counsel  of  the  American 
Atlantic  and  Pacific  Ship  Canal  Company,  the  Committee  there- 
after made  no  report  on  the  Bill. 

But  the  wily  veteran  from  Vermont  was  not  to  be  defeated 
for  the  want  of  so  small  a  matter  as  a  favourable  report  by  the 
Committee  having  it  in  charge,  for  he  knew  too  well  all  the 
back  ways  to  a  congressional  combination,  and  at  once  put  the 
thumbscrews  to  bear  upon  the  "  Eads  Tehuantepec  Ship-Railway 
Bill,"  which  had  been  reported  favourably  by  the  Committee 
of  Commerce. 

The  New  York  end  of  the  ring  hurried  back  to  that  city, 
where  they  might  best  employ  their  energies  in  telegraphing 
members  of  the  House,  and  thereby  bring  a  supposed  popular 
pressure  on  the  members,  and  especially  on  the  friends  of  the 
Eads  Ship-Railway  Bill. 

By  this  antiquated  ruse  but  effective  manoeuvre,  Senator 
Edmunds  so  frightened  the  friends  of  this  Bill  that  he  forced 
them  to  an  agreement  to  combine  in  their  measures,  to  call  the 
Maritime  Canal  Company  Bill  out  of  the  hands  of  the  Committee 
and  put  it  upon  its  passage  in  the  House  without  any  report  from 
the  Committee ;  but  here  ap*ain  he  miscalculated  his  distance. 

The  combination  proveci  fatal  to  both  Bills.  The  Ship- 
Railway  Bill  doubtless  would  have  passed,  but  when  coupled 
with  the  odious  Nicaragua  Canal  scheme  it  developed  such 
opposition  that  both  Bills  failed  to  get  recognised,  and  the 
session  expired  without  action  on  either  of  them. 

In  the  meantime  the  "  Navy  Ring  "  again  secured  leave  of 


29 

absence  for  A.  G.  Menocal,  Civil  Engineer,  United  States 
Navy,  and  he  slipped  away  to  Nicaragua  to  make,  if  possible, 
another  deal  for  a  fresh  concession  with  the  Government 
of  .Nicaragua. 

THE  GOOD  FAITH  OF  THE  REAL  COMPANY. 

At  this  time  the  American  Atlantic  and  Pacific  Ship  Canal 
Company  had  made  arrangements  with  its  contractors  to  go  at 
once  to  work  on  its  Canal  in  Nicaragua,  and  on  the  10th  day  of 
March,  1837,  the  Phoenix  Bridge  Company,  of  Phcenixville, 
Pennsylvania,  contractors  for  the  construction  of  over  half  the 
works  of  the  Canal,  cabled  the  Government  of  Nicaragua  that 
that  Company  was  ready  to  put  2,000  men  to  work  on  the  Canal, 
and  to  immediately  begin  the  most  important  part  of  the  work, 
the  construction  of  the  locks,  bridges,  <&c.,  &c.  To 
demonstrate  further  the  good  faith  and  sincere  purpose  which 
had  marked  every  step  ol  the  American  Atlantic  and  Pacific 
Ship  Canal  Company's  negotiations  with  the  Government  of 
Nicaragua,  this  Company  got  the  Consul- General  of  Nicaragua 
in  New  York  to  cable  his  Government  as  to  the  responsibility 
and  standing  of  the  Company,  which  had  just  offered  to  put 
2,000  men  to  work.  The  Phoenix  Bridge  Company  wrote  to 
the  Representative  of  Nicaragua  as  follows  : — 

"  HON.  ALEXANDER  I.  COTHEAL,  "  March  14,  1887. 

"  Consul-General  for  Nicaragua, 

"  New  York. 

"  Dear  Sir. — The  Phoenix  Bridge  Company  has  entered  into  contract 
•with  the  American  Atlantic  and  Pacific  Ship  Canal  Company,  to  construct 
over  one-half  of  the  work  necessary  to  complete  the  said  Company's  Inter- 
oceanic  Ship  Canal  across  the  territory  of  Nicaragua.  We  are  fully 
prepared  to  carry  out  and  execute  our  contract  with  said  Company.  On  the 
lOih  instant  we  telegraphed  the  President  of  Nicaragua  as  follows  : 

" '  PRESIDENT  NICARAGUA, 

"  '  Managua." 

"  '  We  have  contracted  to  construct  over  one-half  Canal,  are  ready  to  put 
two  thousand  men  to  work,  agent  sent  next  steamer  to  arrange  canal 
business  with  guarantee. 

(Signed)        "'THE  PHCEN1X  BRIDGE  CO.' 

"  Will  you  do  us  the  favour,  as  Consul-General  of  Nicaragua,  to  tele- 
graph that  Government  about  the  responsibility  of  our  Company,  and  the 
bona-Jide  of  our  undertaking  and  our  purpose  to  construct  the  canal  in  the 


30 

shortest  possible  time  ;  and  that  we  earnestly  desire  a  most  cordial  and 
immediate  understanding  with  the  Government  of  Nicaragua  that  we  may 
at  once  and  uninterruptedly  proceed  with  the  work  of  constructing  the 
canal. 

"  Very  respectfully,  your  obedient  Servants, 

(Signed)        «  THE  PHCENIX  BRIDGE  CO., 

"  By  A.  BONZANO,  Chief  Engineer. 

Responding  to  this  suggestion    Mr.    Cotheal    cabled     his 

Government  as  follows: — 

"March  15,  1887. 
"To  MINISTER  FOREIGN  AFFAIRS, 

"  Managua. 

"  Phoenix  Bridge  Company,  a  responsible  company,  represent  they  have 
contracted  for  over  half  of  canal.  Desire  commence  work  immediately. 
Say  will  send  agent  confer  with  Government,  Nicaragua. 

"  Company  request  answer. 

"  COTHEAL, 

("Answer  paid.")  "Consul-  General." 

It  is  not  necessary  to  analyse  very  deeply  to  ascertain  whose 
was  the  voice  that  spoke  in  the  reply  to  these  cablegrams. 
Mr.  A.  G.  Menocal  was  in  Managua,  at  the  side  of  the  President, 
and  urging  his  wishes  on  the  Government,  offering  large  induce- 
ments in  enormous  sums  of  his  Company's  stock.  It  was  not 
therefore  much  of  a  surprise  when  the  American  Atlantic  and 
Pacific  Canal  Company  received  the  following  : — 

"62,  West  36  Street, 

"  New  York,  March  18,  1837. 
"THE  PHCENIX  BRIDGE  Co., 

"  Koom  58,  49  William  Street, 

"  New  York. 

"  The  following  cablegram  has  just  been  received  from  Nicaragua  : — 

"  '  Managua,  March  17,  1887. 
"' All  canal  concessions  forfeited.     Make  it  public.     Consequently  we 

can't  understand  your  cablegram. 

" '  ELIZANDO.' 
"  I  am,  Sir, 

"  Yours  repectfully, 
(Signed)        "ALEXANDER  I.  COTHEAL, 

"  Consul- General  of  Nicaragua.' 

In  the  meantime,  the  agent  of  the  Nicaraguan  Canal  Asso- 
ciation, A.  G.  Menocal,  civil  engineer,  U.S.N.,  was  actively 
engaged  in  his  negotiations  with  certain  officials  of  the 
Nicaraguan  Government,  and  again  adopted  his  old  methods  of 


31 

reaching  the  official  ear  of  that  Government  by  offering  and 
agreeing  to  give  large  blocks  of  the  capital  of  said  Company, 
amounting  to  6  per  cent,  of  all  the  shares,  bonds,  certificates 
or  title  deeds  issued  by  said  proposed  Maritime  Canal  Company 
of  Nicaragua';  and  by  further  agreeing  to  make  an  insignificant 
deposit  as  a  guarantee  or  advance  to  said  Government,  ho 
succeeded  in  influencing  the  Government  of  Nicaragua  to  again 
make  with  his  Company  a  new  contract  or  concession ;  this 
contract  was  signed  on  the  part  of  Nicaragua  by  Ad. 
Cardenas,  and  for  the  Society  by  A.  G.  Menocal,  as  was  also 
their  former  contract ;  and  the  said  agent  thereafter  returned  to 
"Washington;  and  again  (1888)  this  Maritime  Canal  Company 
asks  of  Congress  an  Act  incorporating  said  Company. 

It  will  be  seen  from  the  foregoing  record  that  this  Maritime 
Canal  Company  of  Nicaragua  has  now  been  before  Congress 
with  its  Bills  since  the  year  1880. 

And  what  with  the  three  expensive  United  States  Survey- 
ing Expeditions  to  Nicaragua,  the  great  value  in  time  and  money 
consumed  by  Congress  in  the  consideration  before  the  Com- 
mittees, and  in  both  Houses  of  Congress,  on  the  various 
Bills  of  Incorporation,  their  Bill  for  a  guarantee  of  three  (3) 
per  cent,  on  their  capital  stock,  involving  a  proposed  liability 
of  $45,000,000  on  the  part  of  the  United  States,  in  their 
Senatorial  item  of  $250,000  appropriation  ;  in  the  drawing  of 
monthly  salaries  of  these  officers  and  engineers  of  the  United 
States  Navy,  United  States  Commissioners,  United  States 
Ministers,  &c.,  in  the  consumption  of  materials  and  time  paid 
for  by  the  United  States  Government,  while  the  separties  have 
been  all  these  years  engaged  in  this  private  scheme  to  enrich 
themselves.  The  amount  of  money  which  the  United  States 
Government  has  already  been  forced  to  pay  on  account  of  the 
above  recited  measures  for  the  benefit  of  the  parties  known  as 
the  Maritime  Canal  Company  of  Nicaragua  will  never  be  known, 
but  must  certainly  amount  up  to  over  a  million  dollars. 

The  many  disreputable  attempts  to  seize  upon  the  rights  of 
way,  water  channels  and  canal  route  of  the  American  Atlantic 
and  Pacific  Ship  Canal  Company  by  these  naval  officers  and 
their  confederates,  and  the  various  adroit  and  deeply  laid 
schemes  to  force  the  United  States  Government  to  furnish  the 


32 

means  of  enabling  them  to  float  their  colossal  Credit  Mobilier 
scheme,  has  made  the  name  of  the  Maritime  Canal  Company 
of  Nicaragua  odious.  As  showing  how  unpopular  this 
scheme  has  become  in  the  public  mind,  we  reprint  the  following 
from  the  San  Francisco  News  Letter,  which  says  : — 

"  The  Nicaragua  Canal  scheme  is  one  of  the  most  barefaced 
jobs  ever  attempted,  and  it  is  steered  by  the  most  unscrupulous 
crowd  of  wire  pullers  that  ever  trod  the  United  States.  It 
comes  before  Congress  ostensibly  for  a  franchise,  an  endowment 
of  corporate  existence.  This  is  a  transparent  pretence,  because, 
so  far  as  getting  a  corporate  existence  is  concerned,  it  can  do 
that  under  the  general  laws  of  any  State.  The  object 
which  the  promoters  of  this  scheme  have  in  bringing  this 
matter  before  Congress  is  to  bind  the  Government  in  such  a 
way  that  it  will  practically  have  to  build  the  canal  for  the 
manipulators.  When  the  matter  was  first  brought  before 
Congress,  eight  or  nine  years  ago,  this  purpose  was  boldly 
avowed.  Since  then  the  manipulators  of  this  raid  on  the 
Treasury  have  been  more  careful.  They  now  leave  out  the 
clauses  which  bind  the  Government,  with  the  intention  of 
slipping  them  in  when  the  Bill  goes  upon  its  final  passage. 
This  is  an  old  and  dishonest  trick — as  old  and  as  dishonest  as 
the  canal  scheme  itself.  Congress  should  throw  this  Bill  out 
as  soon  as  it  is  introduced.  It  has  been  before  the  National 
Legislature  too  often  already.  And  the  rogue  who  introduces 
it  should  be  expelled/' 

On  the  10th  of  January,  1888,  Senator  Edmunds  again 
introduced  a  Bill  to  incorporate  the  Maritime  Canal  Company 
of  Nicaragua  (Senate  Bill,  No.  1305).  On  the  23rd  day  of 
January,  1888,  the  Bill  was  also  introduced,  by  Mr.  Norwood, 
in  the  House  of  Representatives.  On  the  same  day  that  the 
Bill  was  introduced  in  the  House,  and  following  closely  upon 
the  heels  of  Senator  Edmunds'  Bill  in  the  Senate,  comes  his 
astute  lieutenant,  the  Senator  from  Massachusetts,  with  his 
Joint  Resolution  (S.  R.  40). 

THE  ATTEMPT   TO   USE   THE  EXECUTIVE. 

This  Joint  Resolution  (S.R.40)was  introduced  in  the  Senate, 
January  23,  1888,  by  the  Senator  from  Massachusetts,  Mr. 
Hoar;  and  from  the  public  prints  we  learn  its  probable 
scope.  This  Joint  Resolution  is  directed  to  "  obtaining  the 
freedom  of  certain  canals  and  ship-railways  therein  named 
for  the  American  Mercantile  Marine,"  and  with  a  view 


33 

to  forward  this  object  "  the  President  is  requested  to  open 
negotiations  with  the  Government  of  Great  Britain  and 
the  Dominion  of  Canada,  for  the  purpose  of  having  the 
Welland  Canal  made  free  for  the  merchant  ships  of  the  United 
States,  and  also  for  the  construction  and  opening  of  a  free  ship 
canal  from  the  Bay  of  Fundy  to  the  Gulf  of  St.  Lawrence  at 
the  joint  expense  of  both  nations."  "  The  President  is  also 
requested,  in  view  of  the  probable  competition  of  the  proposed 
oanal  and  ship-railway  to  unite  the  Atlantic  and  Pacific  Oceans, 
to  enter  upon  negotiations  with  the  proper  authorities  to  secure 
the  freedom  of  the  canal  in  perpetuity  for  the  American 
merchant  marine,  and  to  take  similar  steps  to  obtain  the 
freedom  of  the  Suez  Canal  for  the  American  mercantile  service." 

The  Senator  from  Massachusetts  (Hoar)  knew  full  well  that 
that  part  of  the  Joint  Resolution  referring  to  the  Welland  Canal, 
and  the  proposed  wild-cat  Canal  across  the  Isthmus,  from  the 
Bay  of  Fundy  to  the  Gulf  of  St.  Lawrence,  was  humbug  ;  as 
he  also  knew  the  obtaining  the  freedom  of  the  Suez  Canal  for 
the  mercantile  marine  of  the  United  States  was  a  wholly 
chimerical  dream ;  and  such  negotiations,  if  attempted  by  the 
President  of  the  United  States,  would  end  in  nothing  but 
ridiculous  failure. 

To  any  diplomatic  mind,  or  to  those  who  understand  inter- 
national law  and  the  comity  of  nations,  this  Joint  Resolution 
(S.  R.  40)  is  simply  senatorial  fustian,  as  such  a  proposition  can 
never  receive  a  moment's  serious  consideration  by  the 
representatives  of  other  powers.  No  single  nation  could  be 
allowed  such  marked  advantages  as  against  the  balance  of 
the  world's  commercial  marine.  Does  the  Senator  from 
Massachusetts,  with  his  years  of  experience,  even  dream 
of  obtaining  such  concessions  from  Canada  as  his  reso- 
lution implies  can  be  obtained?  Does  he  imagine  that  the 
United  States  possesses  such  abounding  influence  that  it  has  but 
to  ask  and  receive  from  Europe  the  freedom  of  the  Suez  Canal ; 
or,  in  other  words,  such  concessions  as  will  give  the  rapidly 
growing  American  commercial  marine  a  great  lead  in  the  world's 
race  ?  The  suggestion  is  preposterous  ? 

But  what  care  the  framers  of  this  resolution  if  it  places  the 
President  of  the  United  States  in  a  ridiculous  position  before 


34 

the  world,  if  they  can  thereby  attain  their  ends  ?  But  their 
objects  are  too  transparent  to  succeed — too  obvious  to  pass 
unchallenged.  The  American  Atlantic  and  Pacific  Ship  Canal 
Company  does  not  believe  that  the  said  resolution  was  intro- 
duced honestly  and  with  the  sole  purpose  of  promoting  the 
interests  of  the  mercantile  marine  of  the  United  States. 

This  Company  believes  that  the  resolution  is  wholly  dishonest 
in  its  objects,  and  is  an  integral  part  of  an  adroit  and  deep-laid 
scheme  to  commit  the  United  States,  by  contract,  to  the  so-called 
Maritime  Canal  Company  of  Nicaragua,  which  Company  is  now 
asking  of  Congress  a  charter  of  incorporation,  the  said  parties 
claiming  to  have  a  concession  to  build  a  canal  across  the  State  of 
Nicaragua;  but  which  so-called  concession  or  contract  made  with 
the  Government  of  Nicaragua,  and  Act  of  the  Legislature  con- 
firming said  contract,  is  wholly  unconstitutional  and  legally  void. 

It  is  believed  by  this  Company  that  the  reference  in  said 
Joint  Eesolution  (S.  E.  40)  to  the  Suez  Canal,  the  Welland 
Canal,  and  the  proposed  Bay  of  Fundy  Canal,  and  the  effort  to 
get  up  a  patriotic  bubble  for  the  Mercantile  Marine,  is  so 
much  surplusage,  and  introduced  as  a  blind  to  cover  up  the 
"  job  "  concealed  behind  this  verbiage.  The  real  object  is  that 
the  President  should  enter  into  negotiations  with  the  anxiously 
waiting  shareholders  and  managers  of  the  Maritime  Canal 
Company  of  Nicaragua,  who  have  spread  their  legislative  net 
with  the  adroit  skill  of  old  congressional  tacticians,  and 
they,  by  this  Joint  Eesolution,  try  to  drive  the  President  into 
their  toils.  Under  the  command  of  this  Joint  Eesolution  (which 
doubtless  they  will  work  through  Congress)  they  demand  that 
the  President  shall  make  a  contract  with  this  Maritime  Canal 
Company  of  Nicaragua — a  company  which  has  agreed,  and  is 
bound  by  the  terms  of  its  so-called  concession,  to  let  all  the 
vessels  and  commerce  of  certain  favoured  Governments  pass 
through  their  canal  for  one-half  of  the  tariff  or  tonnage  dues 
and  tolls  charged  upon  vessels  and  the  mercantile  marine 
sailing  under  the  United  States  flag. 

Yet  against  this  disastrous  and  uncalled  for  embargo 
laid  upon  American  commerce  by  this  so-called  concession, 
and  which  the  Senator  from  Vermont  is  endeavouring  to  for- 


35 

ever  fix  upon  the  mercantile  marine  of  the  United  States  by 
his  Bill  to  incorporate  this  Maritime  Canal  Company — yet 
against  the  passage  of  this  Act  we  hear  no  word  of  protest, 
no  sign  of  denunciation  from  the  Senator  from  Massa- 
chusetts !  The  mercantile  marine,  about  which  he  is  so  anxious 
in  Canada  and  Egypt,  he  is  willing  altogether  to  abandon  in 
Nicaragua !  Is  this  his  patriotism  ? 

"What  is  the  real  motive  of  this  Joint  Resolution  ?  It  is  this  : 
Should  the  Maritime  Canal  Company  get  an  Act  of  Incorporation 
from  the  United  States  Congress,  such  Act  cannot  and  will  not 
vest  in  that  Company  any  legal  titles  to  real  estates,  or  give  it 
any  rights  of  eminent  domain  in  the  State  of  Nicaragua.  Nor 
can  such  Incorporation  in  any  way  authorise  the  Maritime 
Canal  Company  to  seize  upon,  occupy  and  use  the  rights  of 
way,  water  channels,  and  canal  route  of  the  American  Atlantic 
and  Pacific  Ship  Canal  Company.  Therefore,  if  the  Act  asked 
for  is  passed  by  Congress,  the  Company  would  be  but  little 
advanced,  and  in  legal  effect  their  status  would  not  be  at  all 
improved,  so  far  as  Nicaragua  is  concerned. 

Knowing  the  inadequacy  of  their  title,  and  appalled 
by  the  absolute  weakness  of  their  position,  they  determine 
to  overcome  it,  if  possible,  by  making  a  contract  with 
the  United  States  Government— an  official  agreement 
that  would,  by  its  own  inherent  force,  strengthen  their 
shadowy  title ;  and  this  is  to  be  accomplished  under  the 
innocent  guise  of  the  Joint  Resolution,  S.  R.  40  :  "  As 
"  to  obtaining  the  freedom  of  certain  canals  and  ship-railways 
"  therein  named  for  the  American  Mercantile  Marine,  in  order 
"  to  encourage  ocean  shipbuilding  and  promote  commerce  with 
"  foreign  nations." 

This  resolution  strongly  reminds  us  of  the  artfully  disguised 
item  in  the  Senate  appropriation  of  $250,000  in  1884,  when  the 
Maritime  Canal  Company  of  Nicaragua  was  trying  to  smuggle 
that  amount  out  of  the  United  States  Treasury  under  the  Senate 
item  :  "  To  meet  the  necessary  expenses  attendant  upon  foreign 
"  intercourse,  to  be  expended  under  the  direction  of  the  President 
"  pursuant  to  the  requirements  of  section  291  of  the  Revised 
"  Statutes,  $250,000,  or  so  much  thereof  as  may  be  necessary." 


It  will  be  seen  that  the  Senate  proposed  to  force  the  Presi- 
dent of  the  United  States  to  lend  his  aid  to  perpetrate  that 
fraud  upon  the  people  of  the  United  States  ;  and  the  President 
is  now  called  upon  by  this  Joint  Resolution,  S.  R.  40,  "  to  enter 
"  into  a  contract  with"  some  one,  which  they  will  be  pleased  to 
name !  It  is  this  same  Maritime  Canal  Company  come 
again ! 

The  managers  of  the  so-called  Maritime  Canal  Company  of 
Nicaragua  having  failed  to  get  the  United  States  Guarantee 
of  3  per  cent,  upon  $75,000,000  of  their  capital,  or  in  com- 
mitting the  Government  to  a  liability  of  $45,000,000  in  a 
former  session,  and  having  failed  to  smuggle  the  $250,000  from 
the  Treasury  under  a  Senate  item,  as  hereinbefore  shown,  are 
evidently  trying  another  dodge  to  get  at  the  money  in  the  Trea- 
sury, and  doubtless  think  if  they  can  now  secure  a  contract  with 
the  Government  of  the  United  States,  and  a  large  sum  of  money 
paid  down,  or  to  be  paid,  by  the  Government,  that  such  a 
contract  would  enable  them  to  float  their  great  Credit  Mobilier 
scheme,  with  its  proposed  inflated  capital  of  $200,000,000,  upon 
a  canal  which  they  claim  will  only  cost  them  $64,000,000. 

But  should  it  become  necessary  to  increase  this  estimate  of  cost, 
by  reason  of  any  contract  to  be  made  by  them  with  the  United 
States  Government,  why,  nothing  is  easier,  they  can  raise  the 
price  to  suit  the  purpose  required,  and  no  questions  will  be  asked. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company, 
while  modestly  claiming  for  themselves  as  much  patriotism  and 
love  of  country  as  the  honourable  Senator  from  Massachusetts, 
possess  also  as  great  a  desire  to  see  the  United  States  the  first 
maritime  power  on  the  globe,  and  in  their  efforts  to  provide  a 
highway  for  that  commerce  the  shareholders  of  this  Company 
have  spent  millions  of  dollars,  yet  our  enthusiasm  has  never  led 
us  to  approach  the  Congress  of  the  United  States  begging  alms 
of  the  Government,  nor  has  this  Company  tried  to  abstract 
money  by  stealth  and  cunningly  devised  headings  in  any  item 
in  an  appropriation  bill,  nor  have  they  tried  to  force  a  contract 
from  the  Government  under  the  guise  of  an  artfully  drawn 
Joint  (S.  R.  40)  Resolution.  This  Company  has  never  had  need, 
nor  does  it  now  require,  to  borrow,  beg  or  steal  one  cent  from 


37 

the  United  States  Government,  nor  has  any  of  its  officers  ever 
drawn  one  dollar  of  salary  as  a  Navy  Yard  Commander  or  as 
Engineer,  in  the  United  States  Navy. 

This  Company  is  not  seeking  the  crutches  of  a  contract 
from  the  United  States  Government  in  order  to  hobble  out 
before  the  world;  and  therefore  we  make  no  unwise  proposals  of 
a  contract  to  the  Government  of  the  United  States. 

Our  interoceanic  ship  canal,  when  built  across  the  State  of 
Nicaragua,  will  be  an  international  canal  for  the  use  of  all 
nations  upon  equal  terms.  There  will  be  no  unjust  discrimina- 
tions against  the  United  States,  and  no  foreign  nations  shall  pass 
their  commerce  through  at  50  per  cent,  reduction  on  the  tariff 
charged  upon  vessels  sailing  under  the  United  States  flag. 

THE  LEGAL   QUESTION. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
further  declares  and  sheweth  to  your  Excellency,  that  the  con- 
tract made  by  the  State  of  Nicaragua  to  and  with  the  said  A.  G. 
Menocal  and  the  Nicaragua  Canal  Association  on  the  23rd  day 
of  March,  1887,  and  the  Act  of  the  Congress  of  Nicaragua,  con- 
firming said  contract,  relating  to  the  construction  of  a  canal 
across  that  State,  between  the  Atlantic  and  Pacific  Ocean,  is 
wholly  unconstitutional  and  legally  void,  because  of  the  prior 
and  existing  contract  and  statutes,  made  by  the  lawful  authority 
of  Nicaragua,  to  and  with  the  American  Atlantic  and  Pacific 
Ship  Canal  Company. 

For  all  of  the  foregoing  and  other  good  and  sufficient  reasons, 
the  American  Atlantic  and  Pacific  Ship  Canal  Company  hereby 
respectfully  urges  its  protest  against  the  United  States  Govern- 
ment, or  you,  Sir,  as  President  of  the  United  States,  entering  into 
any  negotiation  or  contract  of  any  kind  or  nature  whatsoever 
with  the  said  Maritime  Canal  Company,  as  requested  by  said 
Joint  Resolution  (S.  H.  40),  or  any  other  resolution,  act,  or 
demand  of  Congress,  or  to  do  or  perform  any  act  of  any  kind  or 
nature  whatsoever  that  will  detrimentally  affect  and  prejudice 
the  rights,  legal  and  equitable,  of  the  shareholders  of  the 
American  Atlantic  and  Pacific  Ship  Canal  Company  in  and  to 
its  interoceanic  canal  route,  its  exclusive  rights  of  way,  and  its 


38 

vested  rights  of  property  in  and  to  the  water  channels,  rivers 
lakes,  streams  and  lands,  and  its  other  inalienable  rights  of 
property  situated  in  the  State  of  Nicaragua. 

And  this  Company  further  urges  its  solemn  protest  against 
the  United  States  Government,  or  any  of  the  Executive  Depart- 
ments of  the  United  States  Government,  giving  aid,  pecuniary 
assistance,  countenance,  encouragement  or  moral  support  of  any 
kind  or  nature  whatsoever  to  said  Maritime  Canal  Company  of 
Nicaragua,  or  any  other  company,  persons  or  parties  engaged 
in  any  attempt  to  obstruct,  hinder,  delay  and  prevent  the  said 
American  Atlantic  and  Pacific  Ship  Canal  Company  from 
building  its  interoceanic  ship  canal  across  the  territory  of 
Nicaragua,  or  to  any  party,  Company,  or  persons  engaged  in  any 
attempt  to  seize  upon,  occupy,  use  and  confiscate  the  property, 
the  canal  route,  water  channels  and  other  property  of  this 
Company  situated  in  said  State  of  Nicaragua. 

This  Company  begs  to  state  that  the  Government  of 
Nicaragua  has,  in  each  and  every  instance,  illegally  and  arbi- 
trarily violated  the  contracts  made  by  that  Government  with 
the  American  Atlantic  and  Pacific  Ship  Canal  Company. 

This  Company  declares  that  each  and  every  attachment, 
seizure  and  confiscation  of  the  property  of  the  shareholders  of 
this  Company,  its  Accessory  Transit  Company's  plant,  steamers, 
wagons,  carriages,  outfits,  houses,  warehouses,  stations,  piers, 
shops,  &c.,  and  the  seizure  of  the  canal  route  and  other  property 
of  the  American  Atlantic  and  Pacific  Ship  Canal  Company  has 
been  done  in  an  arbitrary,  illegal  manner,  and  without  valid 
action  at  law,  and  not  in  accordance  with  the  provisions  of  the 
said  several  contracts. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
was  organised  under  a  grant  from  the  Republic  of  Nicaragua, 
of  date  August  27,  1849  ;  the  Company  was  chartered  in  1850. 
On  the  19th  of  April,  1850,  it  was  the  subject  of  a  treaty  of 
protection  between  the  United  States  and  Great  Britain  known 
as  the  Clayton-Bulwer  Treaty. 

The  Republic,  at  the  request  of  the  Company,  in  1851 
authorised  the  Company  to  separate  and  divide  its  powers,  and 
to  form  a  new  company  for  transit  purposes,  and  the  accessory 


39 

Transit  Company  was  created  by  the  American  Atlantic  and 
Pacific  Ship  Canal  Company,  and  in  four  years  became  a  powerful  • 
company,  with  a  capital  stock  of  $7,500,000.  It  was  incorpo- 
rated by  Nicaragua,  and  was  owned  by  the  same  parties.  In 
1856  all  of  its  property  was  seized  and  confiscated,  and  the 
Government  of  Nicaragua  issued  a  decree  annulling  the  grant 
and  contract  to  and  with  the  American  Atlantic  and  Pacific 
Ship  Canal  Company.  This  seizure  and  decree  was  wholly 
illegal  and  an  arbitrary  act  by  the  Government  of  Nicaragua. 

In  1857  the  Government  instructed  its  Minister  at  "Wash- 
ington to  negotiate  with  the  American  Atlantic  and  Pacific 
Ship  Canal  Company  to  re-establish  the  transit  across  Nica- 
ragua. The  Convention  of  1857,  June  19,  was  the  result.  This 
was  followed  by  explanatory  articles  of  the  same  year.  Differ- 
ences arose  between  the  State  and  the  Company  concerning  the 
interpretations  of  the  Convention  of  1857,  for  the  settlement 
of  which  the  mode  is  laid  down  in  the  Contract,  Article  8  of  the 
Explanatory  Articles,  by  arbitration  ,  but  no  arbi- 
tration was  held  thereon. 

The  Convention  of  1857  does  not  touch  the  canal  rights, 
which  remain  as  before  in  the  American  Atlantic  and  Pacific 
Ship  Canal  Company  ;  and  that  it  was  so  acknowledged  by  the 
Government  of  Nicaragua  is  shown  by  an  official  letter  of  the 
Nicaraguan  Minister  in  the  United  States,  addressed  to  Mr. 
I.  C.  Lea,  secretary  of  the  American  Atlantic  and  Pacific  Ship 
Canal  Company,  transmitting  an  official  letter  of  the  Secretary 
of  Foreign  Relations  of  Nicaragua,  making  proposals  upon  the 
part  of  Nicaragua,  by  order  of  the  President  of  that  Republic. 
The  letter  of  the  Minister  Yrisarri  is  dated  Brooklyn,  30th 
May,  that  of  the  Minister  of  Foreign  Relations  is  30th  April, 
1858.  In  this  communication  the  Government  of  Nicaragua 
requests  the  consent  of  the  Company  to  make  another  distinct 
contract,  the  basis  and  terms  of  which  were  unsatisfactory  to 
the  Company. 

To  this  request  the  Company  on  the  5th  June,  1858,  sent 
the  following  reply  to  Senor  Don  A.  I.  Yrisarri : — "  The  Com- 
pany therefore  declines  enter  ing  into  new  negotiations  for  a  new  con- 
tract or  for  innovations  of  the  existing  one,  relying  upon  their  rights 
and  the  protections  to  be  accorded  by  Hie  United  States" 


40 

On  March  28th,  1859,  the  Government  of  Nicaragua  again 
issued  a  decree  declaring  the  contracts  made  by  the  State  and 
the  Company  void  and  of  no  effect. 

In  1860  a  "  contract  of  transit "  was  made  between  the 
American  Atlantic  and  Pacific  Ship  Canal  Company  and  the 
Government  of  Nicaragua,  the  Company  paying  to  the 
Government  a  large  sum  of  money  for  the  release  and  return  of 
its  steamers,  houses,  furniture,  wagons,  carriages  and  plant,  &c., 
&c.,  and  the  American  Atlantic  and  Pacific  Ship  Canal  Com- 
pany created  the  "  Central  American  Transit  Company,"  which 
was  owned  by  the  same  persons.  The  canal  rig/its  were 
specially  reserved  to  the  American  Atlantic  and  Pacific  Ship 
Canal  Company  in  this  contract.  And  the  American  Atlantic 
and  Pacific  Ship  Canal  Company  organised  these  Transit  Com- 
panies for  the  purpose  of  aiding  and  enabling  it  to  construct  its 
Canal,  as  is  clearly  shown  by  the  records.  We  now  print  from 
clauses  of  these  contracts.  In  the 

CHARTER   GRANTED  BY  THE   STATE   OF  NICARAGUA  TO  THE 
ACCESSORY  TRANSIT  COMPANY, 

<(  The  supreme  Government  of  the  Republic  of  Nicaragua,  fully  autho- 
rised by  legislative  decree  of  the  13th  inst.,  have  agreed,  by  means  of  their 
commissioners,  Don  Fruto  Chamorro  and  Don  Mateo  Mayorga,  with  the  sole 
object  of  facilitating  the  construction  of  the  Maritime  Canal,  and  in 
accordance  with  the  desires  expressed  by  the  Company  of  the  said  Canal, 
represented  by  Joseph  L.  White,  Esq.,  to  divide  and  separate  from  the  con- 
tract of  the  22nd  of  September,  1849,  relating  to  the  construction  of  the 
said  canal  through  the  Isthmus  of  Nicaragua,  the  part  therein  relating  to  the 
navigation  by  si^am  of  the  waters  of  Nicaragua,  and  to  that  effect  they  have 
agreed  to  the  following  convention  :  — 

ARTICLE  'I. 

"  The  Republic  of  Nicaragua  authorises  the  American  Atlantic  and 
Pacific  Ship  Canal  Company  to.  divide  and  separate  from  the  powers^ 
privileges,  and  rights  granted  by  the  treaty,  signed  by  said  Government  on 
the  22ud  September,  1849,  and  amended  the  llth  of  April,  1850,  all  the 
powers,  privileges,  rights,  and  duties  designated  in  the  Articles  6,  14,  21,  22, 
23,  30,  32,  33,  34,  and  all  other  articles  relating  to  the  navigation  of  the 
waters  of  Nicaragua,  not  essential  to  the  construction  or  use  of  the  said  ship 
canal." 


41 

ARTICLE  II. 

"  Said  company  is  equally  authorised  to  form  another  company,  distinct 
and  separate,  comprised  of  the  same  members  as  the  former.  This  new 
company  shall  enjoy  the  powers  and  be  subject  to  the  duties  inserted  in  the 
articles  aforesaid,  provided  they  are  not  in  contradiction  to  the  rights 
granted,  and  to  the  duties  imposed  upon  the  Ship  Canal  Company." 

ARTICLE  IX. 

"  It  is  understood  and  agreed  by  and  between  the  contracting  parties  that 
no  expression  used  in  this  convention  can  be  or  shall  be  construed  as  relieving 
either  party  from  the  performance  of  all  the  obligations  imposed  upon  them 
respectively  by  the  charter  of  the  22nd  of  September,  1849,  and  amendments 
thereto  of  the  llth  of  April,  1850." 

By  a  later  contract  of  1861,  the  Central  American  Transit  Company  is 
authorised  by  the  Government  of  Nicaragua  to  be  organised  by  persons 
composing  the  American  Atlantic  and  Pacific  Ship  Canal  Company 
and  certain  rights  and  privileges  which  have  come  to  be  known  as  "  Transit ' 
rights,  as  distinguishable  from  "  Canal "  rights,  are  conferred  upon  the 
associates  in  their  new  capacity.  No  reference  is  made  to  the  outstanding 
Canal  rights,  except  that  a  saving  clause  is  put  in  to  guard  the  grant  against 
a  collision  of  the  Canal  rights  of  the  old  Company  or  other  parties  with  the 
Transit  rights  then  being  given  to  the  new  Company. 

The  clause  referred  to  appears  in  two  contracts  subsequent  to  1857,  and 
is  as  follows : 

"  If  the  Government  of  the  Eepublic  should  be  a  party  to  any  contract 
or  convention  which  now  exists  for  the  construction  of  a  Maritime  Canal 
across  its  territory,  and  the  duration  of  the  rights  and  privileges  stipulated 
for  in  the  present  contract  shall  be  incompatible  with  the  terms  and  con- 
ditions of  said  contract  or  convention  ;  in  such  case  the  rights  and 
privileges  stipulated  for  in  the  present  contract  shall  only  last  until  the 
complete  execution  of  the  work  of  the  Maritime  Canal  according  to  the 
terms  and  conditions  of  said  contract  or  convention." 

This  language  shows  very  clearly  that  it  was  understood  by  the  lawyers 
advising  the  Nicaragua  Government  that  the  Canal  rights  of  the  Company 
had  survived  the  mutations  which  had  overtaken  their  contract  in  other 
respects. 

The  letter  of  the  Nicaraguan  minister,  Mr.  Yrisarri's,  gives  similar 
evidence.  It  is  therefore  clear  that  the  right  to  build  the  canal  granted 
by  the  contract  of  1849  was  not  abrogated. 

The  Transit  Company  undoubtedly  fulfilled  the  obligations 
under  the  contract  of  1861,  but  was  illegally  attached  by  the 
Government  on  the  29th  of  November,  1862,  and  the  contract 
was  declared  invalid  by  a  decree  of  President  Martinez. 


42 

And  on  the  2nd  day  of  March,  1863,  President  (nd 
interim)  Castello  ordered  the  seizure  of  the  route,  steamers, 
carriages,  wagons  and  all  other  materials  used  and  destined 
for  the  service  of  the  Interoceanic  Canal  route,  which  were 
declared  to  be  the  property  of  the  Republic. 

In  November  of  the  same  year,  1863,  a  contract  was  signed 
between  the  Company  and  the  Government  of  Nicaragua — the 
Company  paying  the  Government  this  time  $100,000  for  the 
release  and  return  of  its  steamers  and  other  property.  The 
reservation  of  the  canal  rights  was  continued  by  this  contract 
and  remained,  as  before,  the  property  of  the  American  Atlantic 
and  Pacific  Ship  Canal  Company,  which  was  owned  by  the 
same  parties. 

The  Company  continued  its  work  of  improvement  and 
removal  of  obstructions  from  the  San  Juan  Eiver,  and  other 
works  on  the  canal  route,  and  the  transportation  of  passengers 
and  freight  across  the  Isthmus  until  1868,  when  the  plant 
and  property  was  again  illegally  seized  and  confiscated. 
This  Company  is  advised  by  counsel  that  the  attachment 
and  seizure  was  an  act  of  conspiracy,  aided  and  abetted 
by  Nicaraguan  officials  and  the  judge  who  claimed  and  exercised 
jurisdiction  in  the  case,  though  entirely  incompetent  to  try  such 
an  issue;  these  persons,  byname  Avaristo  Carazo,  Ran  Runnels, 
and  Satiago  Morales,  conspiring  together,  trumped  up  pretended 
claims  against  the  Company,  which  pretended  claims  were  with- 
out consideration  by  the  Company,  and  wholly  fraudulent 
in  fact  and  in  law.  Notwithstanding  this  fact,  these  parties, 
aided  and  abetted  by  the  commercial  judge  of  Grenada,  who 
issued  an  illegal  attachment  against  the  property  of  the  Com- 
pany, and  these  parties  further  conspiring,  and  aided  and  abetted 
by  certain  Nicaraguan  officials,  seized  upon  the  Company's 
steamers,  houses,  furniture,  carriages,  wagons,  and  entire  plant 
in  Nicaragua,  and  had  a  pretended  auction  sale  of  this  extensive 
property ;  but  the  illegality  of  these  fraudulent  proceedings  was 
so  notorious  that  no  bidders  appeared  at  said  pretended  sale ; 
and  this  large  property  of  the  Company  was  divided  among  the 
conspirators. 

But  such  illegal  seizure  and  confiscation  of  its  Transit  Com- 


43 

pany's  plant  and  property  could  not  and  did  not  legally  divest 
the  American  Atlantic  and  Pacific  Ship  Canal  Company  of  its 
exclusive,  inalienable  and  vested  rights  of  property  in  and  to  its 
canal  route,  water  channels,  rights  of  way,  and  other  property 
in  said  State  of  Nicaragua.  This  Company  further  sheweth 
and  declares  that  the  action  of  said  Nicaraguan  court,  and  the 
seizure  of  the  Transit  Company's  plant,  was  wholly  illegal,  and 
were  forced  measures  which  this  Company  had  no  power  to 
resist  or  control.  And  the  American  Atlantic  and  Pacific  Ship 
Canal  Company  further  declares  and  sheweth  that  it  has  in  no 
instance  committed  any  laches  upon  its  part,  but  has  been 
prevented  by  the  numerous  seizures  and  confiscations  of  its 
accessory  company's  plant  and  property  from  prosecution  of  its 
work  of  constructing  its  canal  across  the  State  of  Nicaragua  in 
a  peaceful  and  lawful  manner,  as  provided  for  in  its  contracts 
with  the  Government  of  that  State. 

The  Government  of  Nicaragua  has  not  only  seized  and  con- 
fiscated the  property  of  the  Company  a  number  of  times,  and 
fulminated  a  number  of  annulling  decrees  against  the  Company, 
but  has  also  attempted  to  infringe  this  Company's  exclusive 
right  to  construct  its  ship  canal  across  the  territory  of 
Nicaragua,  and  has  made  or  attempted  to  make  four  distinct 
contracts  or  concessions  to  other  parties  and  persons  during 
the  existence  of  these  contracts,  and  subsequent  to  the  several 
seizures  of  the  Company's  plant  as  aforesaid :  one  of  which 
was  to  M.  Belly,  one  to  M.  Chevalier,  and  two  to  the  "  Navy 
King,"  represented  by  Mr.  A.  G.  Menocal,  Civil  Engineer, 
United  States  Navy.  The  two  last  named  concessions  have  no 
better  legal  tenure  or  title  than  the  two  first  named  conces- 
sions to  the  property,  the  canal  route  and  water  channels 
of  the  American  Atlantic  and  Pacific  Ship  Canal  Company 
situated  in  Nicaragua. 

The  illegality  of  any  concession  or  contract  of  any  person 
or  company  claiming  to  have  a  contract  or  concession  from  the 
Government  of  Nicaragua  to  construct  a  canal  across  that 
State,  other  than  the  American  Atlantic  and  Pacific  Ship 
Canal  Company,  is  clearly  shown  in  the  following  letter  of  the 
Secretary  of  State  of  the  United  States,  Mr.  Cass  to  Mr. 
Lamar. 


44 

DOCUMENT  No.  70. 
56. — Mr.   Cass  to  Mr.  Lamar. 

[Extract,] 
No.  9.]  DEPARTMENT  OF  STATE, 

Washington,  July  25,  1858. 

Sin  :  *  *  *  These  great  avenues  of  intercommunication  are  vastly 
interesting  to  all  commercial  powers,  and  all  may  well  join  in  securing  their 
freedom  and  use  against  those  dangers  to  which  they  are  exposed  from 
aggressions  or  outrages  originating  within  or  without  the  territories  through 
which  they  pass. 

But  the  establishment  of  a  political  protectorate  by  any  of  the  powers  of 
Europe  over  any  of  the  independent  States  of  this  continent,  or,  in  other 
word?,  the  introduction  of  a  scheme  or  policy  which  would  carry  with  it  a 
right  to  interfere  in  their  concerns,  is  a  measure  to  which  the  United  States 
have  long  since  avowed  their  opposition,  and  which,  should  the  attempt  be 
made,  they  will  resist  by  all  the  means  in  their  power. 

The  reasons  for  the  attitude  they  have  assumed  have  been  fully  pro- 
mulgated, and  are  everywhere  well  known.  There  is  no  need  upon  this 
occasion  to  recapitulate  them.  They  are  founded  on  the  political  circum- 
stances of  the  American  Continent,  which  has  interests  of  its  own,  and 
ought  to  have  a  policy  of  its  own,  disconnected  from  many  of  the  questions 
which  are  continually  presenting  themselves  in  Europe,  concerning  the 
balance  of  power  and  other  subjects  of  controversy  arising  out  of  the  con- 
dition of  its  States,  and  which  often  find  their  solution  or  their  postpone- 
ment in  war.  It  is  of  paramount  importance  to  the  States  of  this 
hemisphere  that  they  should  have  no  entangling  union  with  the  powers  of 
the  Old  World,  a  connection  which  would  almost  necessarily  make  them 
parties  to  wars  having  no  interest  in  them,  and  which  would  often  involve 
them  in  hostilities  with  the  other  American  States,  contiguous  or  remote. 
The  years  which  have  passed  by  since  this  principle  of  separation  was  first 
announced  by  the  United  States  have  served  still  more  to  satisfy  the  people 
of  this  country  of  its  wisdom,  and  to  fortify  their  resolution  to  maintain  it. 
happen  what  may. 

The  progress  of  events  has  rendered  the  interoceanic  routes  across  the 
narrow  portions  of  Central  America  vastly  important  to  the  commercial 
world,  and  especially  to  the  United  States,  whose  possessions,  extending 
along  the  Atlantic  and  Pacific  coasts,  demand  the  speediest  and  easiest 
modes  of  communication.  While  the  just  rights  of  sovereignty  of  the 
States  occupying  this  region  should  always  be  respected,  we  shall  expect 
that  these  rights  will  be  exercised  in  a  spirit  befitting  the  occasion  and  the 
wants  and  circumstances  that  have  arisen.  Sovereignty  has  its  duties  as 
well  as  its  rights,  and  none  of  these  local  governments,  even  if  adminis- 
tered with  more  regard  to  the  just  demands  of  other  nations  than  they  have 
been,  would  be  permitted,  in  a  spirit  of  Eastern  isolation,  to  close  these 
gates  of  intercourse  on  the  great  highways  of  the  world,  and  jufetify  the  act 


45 

by  the  pretension  that  these  avenues  of  trade  and  travel  belong  to  them 
and  that  they  choose  to  shut  them,  or,  what  is  almost  equivalent,  to 
encumber  them  with  such  unjust  regulations  as  would  prevent  their  general 
use.  The  United  States  do  not  seek  either  the  control  or  the  exclusive  use 
of  these  routes.  They  desire  that  the  advantages  should  be  equally  common 
to  all  nations.  Nor  do  they  claim  to  interfere  with  the  local  governments 
n  the  determination  of  the  questions  connected  with  the  opening  of  the 
routes,  and  with  the  persons  with  whom,  contracts  may  be  made  for  that 
purpose.  "What  they  do  desire,  and  mean  to  accomplish,  is  that  the  great 
interests  involved  in  this  subject  should  not  be  sacrificed  to  any  unworthy 
motive,  but  should  be  guarded  from  abuse,  and  that  when  fair  contracts 
are  fairly  entered  into  with  American  citizens  they  should  not  be  wantonly 
violated. 

Other  nations  will  no  doubt  pursue  the  same  course  in  relation  to 
their  citizens  or  subjects  who  may  have  similar  interests. 

But  besides  these  general  considerations  applicable  to  this  subject,  there 
are  others  which  impose  additional  obligations  upon  these  isthmian  powers, 
and  which  bear  with  equal  force  upon  their  relations  with  other  nations. 
Several  of  these  power?,  and  Nicaragua  especially,  have  in  fact,  by  their 
public  proceedings,  invited  the  co-op3ration  of  the  capital,  and  industry, 
and  enterprise  of  the  world  in  order  to  open  these  lines  of  communication. 
The  citizens  of  the  United  States  have  contributed  their  fall  share  towards 
the  accomplishment  of  the  enterprise,  and  this  Government  intends  to  use  the 
means  in  its  power  to  protect  them  in  the  enjoyment  of  their  rights.  The 
good  faith  of  Nicaragua  has  been  committed,  and  large  sums  have  been 
expended  looking  to  its  faithful  observance. 

A  paper  has  recently  appeared  in  the  public  journals,  to  which  I  have 
already  referred,  purporting  to  be  a  contract  between  the  Governments — the 
Presidents  rather — of  Costa  Rica  and  of  Nicaragua  and  M.  Belly,  a  French 
citizen,  and  his  associates,  constituting  a  new  canal-route  company,  and 
providing  for  its  operations.  Nothing  is  known  here  officially  of  the 
authenticity  of  this  paper,  but  it  carries  with  it  a  strong  probability  that  it 
is  genuine,  and,  presuming  it  to  be  so,  it  furnishes  you  with  an  occasion  to  lay 
before  these  Governments  the  views  of  the  United  States  respecting  their 
own  interests  and  the  interests  of  their  citizens  involved  in  the  contracts 
for  opening  transit  routes.  So  far  as  regards  the  action  of  Costa  Rica,  the 
President  adheres  to  the  views  laid  down  in  the  instructions  to  our  special 
agent,  Mr.  Jones,  a  copy  of  which  has  been  communicated  to  those  Govern- 
ments, and  also  furnished  to  yourself.  And  the  United  States,  while  they 
interposed  no  objection  to  an  amicable  adjustment  by  those  republics  of  the 
question  of  their  boundary  line,  will  recognize  no  arrangement  which  inter- 
feres with  the  existing  transit  interests  as  insisted  on  in  those  instructions. 

The  United  States  no  more  claim  for  their  citizens  an  exclusive  right  to 
form  contracts  for  opening  these  transit  routes  than  they  claim  for  them 
the  exclusive  use  of  the  routes  when  the  work  is  completed.  Their  con- 
struction is  a  fair  object  of  competition  for  the  citizens  and  subjects  of  all 


other  powers.  The  work  is  as  open  to  M.  Belly  and  his  associates  as  to 
any  other  enterprising  person.  There  are  but  two  points  connected  with 
this  matter  which  have  any  interest  for  the  United  States,  or  which  would 
justify  their  intervention.  Thejirst  is,  that  no  contract  with  M.  Belly,  or 
with  any  one,  indeed,  should  interfere  with  engagements  previously  existing 
with  American  citizens,  but  that  all  such  engagements  should  be  preserved 
inviolate;  and  the  second  is,  that  the  regulations  and  conditions  of  the 
grant  should  be  such  as  to  render  the  routes  free  and  safe  to  all  nations 
but  controlled  by  no  one,  and  upon  moderate  and  reasonable  terms.  It 
would  be  equally  impolitic  and  unjust  for  these  Governments,  in  a 
desire  to  make  those  great  undertakings  profitable  to  themselves,  without 
furnishing  any  contribution  towards  their  construction,  to  levy  onerous 
charges  upon  the  persona  and  property  destined  to  pass  over  them,  and  by 
this  means  interpose  serious  obstacles  to  their  general  use.  These  local 
governments  should  look  to  the  vast  benefits  which  these  enterprises  will 
bring  to  the  countries  through  which  they  pass,  and  not  strive  by  excessive 
impositions  to  make  them  sources  of  revenue,  and  defeat,  by  this  ill-judged 
measure,  the  very  object  sought  to  be  obtained. 

It  is  not  necessary  that  I  should  enter  into  a  detailed  examination  of 
M.  Belly's  contract.  There  are  physical  and  financial  obstacles,  as  well  as 
political  ones,  in  the  way  of  its  execution,  some  of  which  can  hardly  be 
overcome.  I  shall,  therefore,  only  advert  to  one  of  the  provisions,  rather 
with  a  view  to  the  future  proceedings  of  these  Governments  than  from  any 
practical  bearing  it  will  have  in  this  case. 

But  previously  to  doing  so  I  will  bring  to  your  notice  one  extraordinary 
stipulation  which  it  could  scarcely  have  been  expected  would  be  acceptable 
to  the  United  States,  and  which  must  have  been  entered  into  in  the  antici- 
pation of  their  objections  to  it.  Those  objections  are  insurmountable. 

This  obnoxious  arrangement  provides  that  the  French  Government 
shall  have  the  right  to  keep  two  ships  of  war  stationed  in  the  waters  of  Lake 
Nicaragua  for  the  entire  duration  of  the  works. 

I  am  persuaded  that  this  proposition  will  meet  no  favour  from  the 
French  Government,  and  that  its  name  has  been  introduced  here  unwarrant- 
ably and  without  its  knowledge.  The  equality  and  security  of  these  inter- 
oceanic  routes  constitute  a  great  portion  of  their  value  to  the  world,  and  all 
commercial  powers  are  interested  in  their  maintenance.  An  exclusive  right 
in  one  of  these  powers  to  exercise  a  permanent  armed  intervention  would 
give  serious  cause  of  dissatisfaction  to  all  the  others,  and  the  United  States 
freely  avow  their  determination  to  oppose  such  a  measure  should  the 
Governments  of  Costa  Rica  and  Nicaragua  attempt  to  carry  it  into  effect. 

But  there  are  additional  conditions  applicable  to  this  contract  with  M. 
Belly,  and  to  other  contracts  for  similar  purposes  entered  into  by  the 
Government  of  Nicaragua  which  commend  themselves  to  the  Government 
of  the  United  States,  and  will  not  be  disregarded.  There  are  several 
American  citizens  who,  with  different  interests,  claim  to  have  formed  en- 


47 

gagements  with  the  proper  authorities  of  Nicaragua,  for  opening  and  using 
the  transit  routes,  with  various  stipulations  denning  their  privileges  and 
duties,  and  some  of  these  contracts  have  already  been  in  operation.  This 
Government  has  neither  the  authority  nor  the  disposition  to  determine  the 
conflicting  interests  of  these  claimants  ;  but  what  it  has  the  right  to  do,  and 
what  it  is  disposed  to  do,  is  to  require  that  the  Government  of  Nicaragua 
should  act  in  good  faith  towards  them,  and  should  not  arbitrarily  and  wrong- 
fully divest  them  of  rights  justly  acquired  and  solemnly  guaranteed.  The 
United  States  believe  it  to  be  their  duty,  and  they  mean  to  execute  it,  io  watch 
over  the  per sons  and  property  of  their  citizens  visiting  foreign  countries,  and 
to  intervene  for  their  protection  when  such  action  is  justified  by  existing  cir- 
cumstances and  by  the  law  of  nations.  Wherever  their  citizens  may  go 
through  the  habitable  globe,  when  they  encounter  injustice  they  may 
appeal  to  the  Government  of  their  country,  and  the  appeal  will  be  ex- 
amined into  with  a  view  to  such  action  in  their  behalf  as  it  may  be  proper 
to  take.  It  is  impossible  to  define  in  advance  and  with  precision  those 
cases  in  which  the  national  power  may  be  exerted  for  their  relief,  or  to 
what  extent  relief  shall  be  afforded.  Circumstances  as  they  arise  must 
prescribe  the  rule  of  action.  In  countries  where  well-defined  and  estab- 
lished laws  are  in  operation,  and  where  their  administration  is  committed 
to  able  and  independent  judges,  cases  will  rarely  occur  where  such  inter- 
vention will  be  necessary.  But  these  elements  of  confidence  and  security 
are  not  everywhere  found,  and  where  that  is  unfortunately  the  case  the 
United  States  are  called  upon  to  be  more  vigilant  in  watching  over  their 
citizens,  and  to  interpose  efficiently  for  their  protection  when  they  are  sub- 
jected to  tortious  proceedings,  by  the  direct  action  of  the  Government,  or 
by  its  indisposition  or  inability  to  discharge  its  duties. 

But  there  is  yet  another  consideration  which  calls  for  the  attention  of 
this  Government.  These  contracts  ivith  their  citizens  have  a  national  im- 
portance. They  affect  not  ordinary  interests  merely,  but  questions  of  great 
value,  political,  commercial  and  social,  and  the  United  States  are  fully 
justified  by  the  considerations  already  adverted  to  in  taking  care  that  they 
are  not  wantonly  violated,  and  the  safe  establishment  of  an  interoceanic 
communication  put  to  hazard  or  indefinitely  postponed.  The  course  of  the 
Government  of  Nicaragua  with  relation  to  these  engagements  contains  nothing 
in  it  reassuring,  for  the  future  contracts,  duly  executed  with  all  the  forms  of 
law,  carrying  with  them  important  vested  rights,  have  been  arbitrarily  set 
aside  by  executive  decrees— a  mode  of  proceeding  not  recognised  in  the  con- 
tracts themselves — and  without  resorting  to  the  action  of  judicial  tribunals. 
The  facts  in  dispute  have  been  unjustly  assumed,  and  the  hand  of  violence 
has  been  laid  upon  solemn  engagements  which  ought  to  have  found  their 
security  in  the  good  faith  of  the  Government.  lam  not  aware  that  in  any 
case  has  the  forfeiture  of  a  contract  been  declared  in  any  other  way  than  by 
an  arbitrary  decree.  This  is  a  state  of  things  to  which  no  nation  is  bound  to 


48 

submit.  It  is  vain  to  expect  that  the  means  of  men  and  money  required 
from  other  nations  for  the  execution  of  these  works  will  be  furnished  in  the 
face  of  such  manifestations  of  bad  faith.  Without  confidence  these  great 
enterprises  must  fail ;  nor  is  it  probable  that  one  of  them  requiring  a  heavy 
outlay  would  now  be  undertaken  and  completed  without  some  surer 
guarantee  for  their  protection  than  would  be  furnished  by  the  engagements 
of  these  Central  American  States.  The  danger  of  violation  is  too  well 
known  and  appreciated  to  justify  the  expectation  of  the  investment  of 
capital  under  such  unpropitious  circumstances. 

So  long  as  a  pecuniary  object  is  supposed  to  furnish  a  motive  for  rescind- 
ing existing  contracts  and  forming  new  ones,  without  any  regard  to  vested 
rights,  no  progress  will  be  made  in  the  construction  of  canals  or  of  other 
permanent  and  expensive  works  for  transportation. 

The  United  States,  acting  in  behalf  of  their  citizens,  object  to  this  system 
of  confiscation,  and  they  do  not  doubt  but  what  they  will  have  the  concurrence 
of  all  other  powers  who  have  similar  interests  in  these  vastly  important  mea- 
sures. What  the  United  States  demand  is,  that  in  all  cases  where  their 
citizens  have  entered  into  contracts  ivith  the  proper  Nicaraguan  authorities, 
and  questions  have  arisen,  or  shall  arise,  respecting  the  fidelity  of  their  execu- 
tion, no  declaration  of  forfeiture,  either  past  or  to  come,  shall  possess  any 
binding  force  unless  pronounced  in  conformity  with  the  provisions  of  the  con- 
tract, if  there  are  any,  or  if  there  is  no  provision  for  that  purpose,  then, 
unless  there  has  been  a  fair  and  impartial  investigation  in  such  a  manner 
as  to  satisfy  the  United  States  that  the  proceeding  has  been  just,  and  that 
the  decision  ought  to  be  submitted  to. 

Without  some  security  of  this  kind,  this  Government  will  consider  itself 
warranted,  whenever  a  proper  case  arises,  in  interposing  such  means  as  it 
may  think  justifiable,  in  behalf  of  its  citizens  who  may  have  been  or  who 

may  be  injured  by  such  unjust  assumption  of  power. 

*  *  #  *  *  *    • 

I  am,  &c., 

LEWIS  OASS. 

This  Company  laboured  honourably,  faithfully,  persistently, 
and  at  enormous  expense,  to  maintain  itself  against  these  unlawful 
and  forced  measures,  and  only  yielded  to  superior  force,  which 
it  could  not  control ;  but  such  forced  suspension  of  works  in 
Nicaragua  by  the  Company  for  the  time  being  cannot  be  construed 
as  an  abandonment  of  its  grants,  property,  and  "  inalienable 
rights,"  and  its  exclusive  right  and  privilege  to  construct  its  ship 
canal  across  the  territory  of  Nicaragua,  and  also  its  chartered 
rights  as  a,  body  politic  and  corporate  with  perpetual  succession. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
HAS  NEVER  ABANDONED  Us  exclusive  right  to  construct  its  inter- 


49 

oceanic  ship  canal  across  the  territory  of  Nicaragua,  cr  its  rights 
to  othfr  prcpcrty  under  its  contract  with  that  State,  nor  does 
this  Company  now  abandon  its  purpose  and  right  to  build  its 
canal  across  the  State  of  Nicaragua,  which  it  is  fully  determined 
to  do,  unless  prevented  by  the  interference  of  Government)  and 
force  beyond  its  control ;  nor  has  the  Company  surrendered 
or  abandoned  its  chartered  rights  as  a  "  body  politic  and  corporate 
with  perpetual  succession,"  as  granted  by  ihe  Government  of 
Nicaragua  to  this  Company. 

With  the  fair  promises  of  protection  made  by  the  Govern- 
ment of  Nicaragua,  and  the  strongly-drawn  contracts  between 
the  State  and  the  Company,  and  such  powerful  guarantors  as 
those  two  great  nations,  the  United  States  and  Great  Britain, 
the  Company  ought  to  have  been  maintained  in  the  peaceful 
possession  of  its  property  and  its  interoceanic  canal  route.  If 
such  had  been  the  case  the  Company  fully  believes  and  states 
that  its  Interoceanic  Ship  Canal  would  have  been  constructed 
and  in  use  by  the  commerce  of  the  world  many  years  ago. 

CLAUSES  FROM  THE  CONTRACTS. 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
deems  it  unnecessary  to  go  into  a  detailed  and  circumstantial 
history  of  its  incorporation  and  contracts  with  the  Government 
of  Nicaragua,  as  said  contracts  are  matters  of  record.  Nor  is 
it  necessary  to  encumber  this  protest  with  a  reprint  of  all  these 
contracts,  as  made  with  the  Government  of  Nicaragua,  or  the 
statutes  and  decrees  made  by  that  State  to  and  with  this  Com- 
pany, and  under  which  this  Company  acts,  but  this  Company 
herewith  reprints  the  following  articles  from  these  contracts  and 
statutes,  as  being  all,  in  their  opinion,  that  is  necessary  for  the 
purposes  of  this  protest. 

ARTICLE  1. 

"  The  State  of  Nicaragua  grants  to  the  said  Company  the  exclusive  right 
and  privilege  of  constructing  a  ship  canal  across  its  territory  by  a  single 
route,  and  at  its  own  expense,  from  the  port  of  Sc.  John's  of  Nicaragua,  or 
any  more  feasible  point  on  the  Atlantic,  to  the  port  of  Realejo,  Gulf  of 
Amapala  or  Fonseca,  Tamorinda,  St.  John's  of  the  South,  or  any  other 
point  on  the  Pacific  Ocean,  which  the  engineers  of  the  Company  may 
decide  upon,  by  means  of  the  St.  John's  River,  Lake  Nicaragua,  River 
Tipatapa,  Lake  of  Leon,  or  any  other  lakes,  rivers,  waters  and  lands 


50 

situated  within  its  territory,  with  the  object  of  connecting  the  two  oceans, 
and  to  make  use  of,  for  its  construction  and  navigation,  said  rivers,  lakes, 
water,  and  lands,  both  public  and  private.  And  the  State  also  grants  to 
the  Company  the  exclusive  right  to  the  administration,  management,  and 
control  of  said  canal,  according  to  the  following  Articles." 

ARTICLE  JV. 

"  The  exclusive  rights  and  privileges  herein  granted  to  the  said  Company 
by  the  said  State,  shall  be  enjoyed  by  the  same  for  the  fixed  term  of  eighty-Jive 
years,  counted  from  the  day  in  whi"h  the  Canal  shall  be  completed  and  put 

in  use." 

ARTICLE  XXXII. 

"  The  State  also  binds  itself  to  protect  and  defend  the  Company  in  the  full 
enjoyment  of  the  rights  and  privileges  granted  in  this  Contract ;  and  also  binds 
itself  not  to  contract  with,  or  cede  to,  any  Government,  individual,  or  com- 
panies whatsoever,  the  right  of  constructing  a  ship  canal,  railroad,  or  any 
other  communication  across  its  territory  between  the  two  oceans ;  or  the  right 
of  navigating,  by  means  of  steam  vessels,  any  of  its  rivers  or  lakes  which  may 
"be  occupied  by  the  Company  while  this  Contract  continues  in  force.  .  .  ." 

ARTICLE   XXXIII. 

"  In  case  any  dispute  or  controversy  shall  arise  during  the  existence  of 
this  contract,  between  the  State  and  the  Company,  the  same  shall  be 
determined  by  reference  to  five  commissioners,  to  be  chosen  in  the  follow- 
ing manner  :  two  to  be  named  on  the  part  of  the  State,  and  two  to  be 
named  by  the  Company,  and  the  fifth  to  be  selected  by  the  four  others 
appointed,  who  shall  hear  and  determine  the  matters  in  controversy,  and 
decide  upon  the  same,  which  decision  of  the  said  commissioners  shall  be 
final  and  without  appeal,  and  binding  upon  both  the  State  and  Company." 

Article  Y.  of  the  Convention  and  Agreement  entered  into 
on  the  26th  of  October,  1857,  provides — 

"That  in  order  to  simplify  and  expedite  the  objects  proposed  in 
Articles  XXXIII.  and  XXXIV.  of  the  contract  of  August  27th,  1849, 
whenever  it  may  be  necessary  to  appoint  arbitrators  to  decide  such  disputes 
or  controversies  as  may  arise  between  the  Government  of  Nicaragua  and 
the  Company,  one  arbritrator  only  shall  be  appointed  by  each  party,  and 
in  case  of  their  disagreement,  if  the  arbitrators  do  not  within  three  days 
select  a  third  arbitrator,  application  shall  be  made  within  ten  days  to  the 
three  oldest  ministers  plenipotentiaries,  or  ministers  resident  in  default  of 
plenipotentiaries,  or  charges  d'affaires  in  default  of  ministers  resident 
according  to  dates  of  reception  in  Washington,  to  select  such  third 
arbitrator,  and  the  minister  or  diplomatic  representative  of  Nicaragua 
shall  in  no  case  be  one  of  the  three  authorised  to  select.  In  case  any  one 
of  these  ministers  or  charges  d'affaires  shall  excuse  himself,  or  from  any 
cause  should  not  be  able  to  act,  his  place  should  be  successively  supplied 
by  the  next  oldest  minister  or  charge  d'affaires,  according  to  the  order  of 
reception  in  Washington,  until  the  object  is  obtained.  Persons  interested 


51 

in  the  Company,  or  the  officers,  agents,  or  employees  thereof,  cannot  be 
appointed  arbitrators,  nor  can  the  officers,  agents,  or  employees  of  the 
Government  of  Nicaragua  be  so  appointed. 

"  The  arbitration  shall  take  place  in  the  city  of  New  York." 

This  Company  has  formally  requested  the  Government  of 
Nicaragua  to  appoint  its  arbitrators,  or  commissioners,  to  meet 
the  commissioner  or  arbitrator  appointed  by  this  Company,  to 
adjust  and  settle  all  differences  as  between  the  State  and  the 
Company ;  but  up  to  this  date  no  commissioner  or  arbitrator 
has  been  appointed  by  the  Government  of  Nicaragua,  and  no 
arbitration  has  ever  been  had  or  held. 

This  Company  is  advised  by  eminent  counsel :  "  That  there 
i*  no  mode,  under  the  Canal  contract  of  1849,  and  of  the  amend- 
ments thereto,  of  settling  differences  except  by  arbitration ,  as 
there  provided,  and  the  decisions  and  annulments  made  or 

attempted  to  be  made  by  the  Republic,  are  void." 

They  further  say : 

"  We  are  of  the  opinion  that  the  right  conferred  upon  the 
American  Atlantic  and  Pacific  Ship  Canal  Company  by  the 
Republic  of  Nicaragua,  in  the  contract  between  that  Republic 
and  the  Company,  to  build  a  ship  canal  across  the  territory  of  the 
Republic,  survives  unimpaired  in  favour  of  that  Company" 

The  American  Atlantic  and  Pacific  Ship  Canal  Company 
asks  only  this  one  thing  of  the  Congress  and  the  Executive 
of  the  United  States,  i.e.,  that  Congress  will  not  act  as 
advocates,  legislators  and  judges  in  the  case  of  the 
American  Atlantic  and  Pacific  Ship  Canal  Company  versus  the 
Government  of  Nicaragua  and  the  so-called  Maritime  Canal 
Company  of  Nicaragua,  for  such  a  course  would  be  extra- 
judicial,  and  would  be  manifestly  unfair  and  unjust  to  this 
Company,  and  the  citizens  of  the  United  States  who  are  its 
shareholders. 

The  Senate  Chamber  and  the  House  of  Representatives  is 
not  the  proper  court  to  decide  so  important  a  case,  involving  as 
it  does  such  large  vested  rights  of  property,  and  which 
have  cost  the  shareholders  of  the  American  Atlantic  and 

Pacific   Ship    Canal   Company    millions   of  dollars,    honestly 

D 


52 

expended  in  good  faith  under  the  contracts  with  the  Grovern- 
ment  of  Nicaragua. 

Has  the  Congress  of  the  United  States  the  constitutional 
right  to  pass  an  Act  that  has  for  its  objects  and  purposes  the 
sequestration  of  the  vested  rights  of  property  of  American 
citizens  in  a  foreign  country  ? 

Can  Congress  enact  a  statute  which  can  be  sustained,  which 
has  for  its  object  and  purposes  the  violation  of  an  existing 
contract,  statutes  and  decree,  and  which  would  impair  existing 
contracts  between  American  citizens  and  a  foreign  State  ? 

Has  Congress  any  authority  under  the  Constitution  to  enact 
a  law,  which  would  be  in  effect  a  Letter-of-Marque,  against  the 
commerce  and  property  of  citizens  of  the  United  States  ? 

Where  is  the  constitutional  provision  that  authorises  the 
Congress  of  the  United  States  to  enact  special  laws  for  private 
and  personal  corporations,  whose  property  and  business  lie 
wholly  out  of  the  statutory  jurisdiction  of  the  United  States  ? 

Is  there  any  constitutional  provision  authorising  Congress  to 
enact  laws  for  and  to  exploit  a  foreign  Company  in  an  inde- 
pendent and  foreign  State,  whose  proposed  works  and  property 
and  business  to  be  acquired  is  wholly  in  such  foreign  State  ? 

If  the  Bill  to  incorporate  the  proposed  Maritime  Canal 
Company  of  Nicaragua  be  passed  by  Congress,  by  what  rule  of 
law  can  such  Act  vest  legal  title  to  property  in  said  Company 
in  a  foreign  State  ? 

Can  any  Act  of  Congress  regulate  the  tenure  of  title  to  real 
estate,  or  give  to  such  Company  the  power  of  eminent  domain 
in  the  State  of  Nicaragua  ? 

If  Congress  pass  an  Act  incorporating  the  said  proposed 
Maritime  Canal  Company  of  Nicaragua,  is  it  contended,  and  can 
it  be  supposed  that  such  Act  could  legally  authorise  or  empower 
that  Corporation  to  enter  into  possession  and  seize  upon  the 
property  of  the  American  Atlantic  and  Pacific  Ship  Canal 
Company,  situated  in  Nicaragua  ? 

This  Company  is  advised  by  counsel  that  these  naval  officers 
and  their  confederates,  and  the  said  Maritime  Canal  Company 
can  in  no  sense  be  considered  innocent  or  ignorant  trespassers 


53 

upon  the  canal  route,  water  channels,  rights  of  way,  and  other 
property  of  the  American  Atlantic  and  Pacific  Ship  Canal 
Company,  situated  in  said  State  of  Nicaragua ;  and  the  said 
naval  officers  and  their  confederates,  and  the  Maritime  Canal 
Company,  have  entered  into  their  scheme  of  trespass  and  spolia- 
tion with  malicious,  wicked,  and  deliberate  intent,  and  with 
knowledge  of  the  claims  of  exclusive  rights  of  the  American 
Atlantic  and  Pacific  Ship  Canal  Company  in  and  to  said  canal 
route,  rights  of  way,  water  channels,  and  other  properties 
situated  in  said  State  of  Nicaragua,  as  and  in  accordance  with 
the  grants,  contracts,  statutes,  and  decrees  made  by  that  State 
to  and  with  said  American  Atlantic  and  Pacific  Ship  Canal 
Company. 

If  the  so-called  Maritime  Canal  Company  of  Nicaragua  think 
they  have  acquired  any  valid  right  to  enter  upon  and  take  posses- 
sion of  the  American  Atlantic  and  Pacific  Ship  Canal  Company's 
rights  of  way,  water  channels,  its  canal  route  and  other  vested 
and  inalienable  rights  of  property  in  the  State  of  Nicaragua,  then 
the  said  so-called  Maritime  Canal  Company  of  Nicaragua  will 
have  an  opportunity  to  establish  the  validity  of  their  so-called 
concession,  or  any  supposed  rights  which  said  Company  may 
think  they  may  have  acquired  by  reason  of  their  contract  with 
the  said  State,  in  the  proper  courts  and  before  a  competent 
tribunal,  who  can  legally  hear  and  impartially  decide  these 
questions.  For  it  is  the  purpose  of  the  American  Atlantic  and 
Pacific  Ship  Canal  Company  to  take  such  legal  steps  in  the 
proper  tribunals  as  will  establish  the  priority  and  the 
exclusive  and  inalienable  rights  of  property  of  this  Com- 
pany under  the  contracts,  statutes  and  decrees  made  by  the 
lawful  authorities  of  Nicaragua  to  and  with  this  Company,  and 
to  for  ever  establish  the  indubitable,  exclusive  and  inalienable 
right  of  this  Company  to  the  rights  of  way,  water  channels 
and  canal  route  across  the  State  of  Nicaragua,  in  a  full  and 
perfect  manner,  as  set  forth  in  the  contract  and  statute  made 
by  the  State  to  and  with  the  American  Atlantic  and  Pacific 
Ship  Canal  Company. 


54 

Finally,  this  Company  represents  and  sheweth  to  Your 
Excellency  the  unconstitutionality  and  illegality  of  any  Act 
which  Congress  may  pass  to  incorporate  the  so-called  Maritime 
Canal  Company  of  Nicaragua. 

And  should  the  Congress  of  the  United  States  pass  an  Act 
to  incorporate  said  Maritime  Canal  Company  of  Nicaragua,  and 
which  is  intended  and  is  in  effect  an  act  of  spoliation,  and 
threatens  the  vested  and  inalienable  rights  of  property  of 
the  American  Atlantic  and  Pacific  Ship  Canal  Company 
situated  and  being  in  a  foreign  state,  the  American 
Atlantic  and  Pacific  Ship  Canal  Company,  on  behalf 
of  its  shareholders  who  are  citizens  of  the  United  States, 
and  they  as  American  citizens  hereby  most  respect- 
fully request  your  Excellency,  as  President  of  the  United 
States,  to  exercise  your  great  authority  on  behalf  of 
justice,  and  for  the  protection  of  the  vested  and  inalien- 
able rights  of  property  of  the  American  Atlantic  and 
Pacific  Ship  Canal  Company  and  its  shareholders,  citizens 
of  the  United  States,  whose  property  is  situated  in  said 
State  of  Nicaragua,  and  all  of  which  property  is  of  great  value, 
consisting  of  its  rights  of  way,  water  channels,  rivers,  streams, 
lakes,  lands,  its  interoceanic  ship  canal  route,  and  other  property, 
as  granted  under  contract  made  by  said  State  of  Nicaragua  to 
and  with  the  American  Atlantic  and  Pacific  Ship  Canal  Com- 
pany and  its  shareholders,  citizens  of  the  United  States  of 
America,  and  as  confirmed  and  secured  to  the  said  Company  and 
its  said  shareholders  by  statute  and  decree  enacted  and  made 
by  the  Congress  and  lawful  authority  of  said  State  of  Nicaragua. 

And  that  Your  Excellency,  in  such  exercise  of  your  great 
authority  in  the  cause  of  justice  and  for  the  protection  of  the 
citizens  of  the  United  States  in  a  foreign  country,  and  for  the 
safeguarding  of  the  vested  rights  and  properties  of  American 
citizens,  where  such  property  is  situated  in  a  foreign  state, 
this  Company  most  respectfully  and  urgently  requests  you  to 
exercise  your  constitutional  authority  and  to  disapprove  such 


55 

Bill  to  incorporate  the  Maritime  Canal  Company  of  Nicaragua, 
and  that  you  will  veto  the  Act  if  it  be  passed  by  the  Congress 
of  the  United  Slates. 

And  for  all   other  and   further   relief  this  Company   will 
ever  pray. 

The  Company  have  the  honour  to  be, 

Sir: 
Your  Excellency's 

Most  obedient  Servants, 

THE  AMERICAN  ATLANTIC  AND  PACIFIC 
SHIP  CANAL  COMPANY, 

By  A.  L.  BLACKMAN, 

PRESIDENT. 

NH.W  YORK,  February  27th,  1888. 


